Repealing ACA could result in 1.2M US jobs lost by 2019: 6 findings

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Efforts by Republican lawmakers to repeal the ACA could cause a ripple effect through the U.S. economy and ultimately lead to over a million lost jobs across all states, according to a report from the Economic Policy Institute.

The report, by Josh Bivens, PhD, director of research at EPI, provides a rough estimate of how the combination of tax cuts and curbed spending under an ACA repeal with no replacement could affect employment in the U.S.

Here are six main findings from the report.

  1. ACA repeal without a replacement would cut overall federal spending by approximately $109 billion in 2019 and taxes by roughly $70 billion in 2019.
  1. The combination of tax cuts with spending cuts as a result of ACA repeal would reduce national job growth by nearly 1.2 million in 2019. According to Dr. Bivens, this is because spending cuts would impair job growth more than the tax cuts would support it. "The benefit cuts would come mostly out of the pockets of cash-constrained households that will be likely to significantly cut back their spending in response to lower disposable income, while the tax cuts would disproportionately go to high-income households who tend to save a significant portion of increases in disposable income," Dr. Biven wrote.
  1. Jobs beyond the healthcare sector would be affected by ACA repeal. Previous studies on added jobs through Medicaid expansions in the American Recovery and Reinvestment Act show that more than three-fourths of jobs gained were not in the healthcare sector, according to the report.
  1. Every state would experience some job loss. The significance of this job loss would be determined by the extent to which a state expanded spending under the ACA — thus how much spending it would lose — and what portion of the state's population falls into the groups that receive the largest tax breaks — thus how much it will gain.
  1. The 15 states that would lose the most jobs, as measured by jobs lost as a share of both the total employment and the share of residents under age 65, include Arizona, Colorado, Kentucky, Louisiana, Maryland, Montana, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Rhode Island, Vermont, Washington and West Virginia.
  1. Although states that never expanded Medicaid will generally face a lower relative burden from repeal, "it is important to note that these same states benefit disproportionately from the insurance premium and cost-sharing subsidies of the ACA," Dr. Biven wrote. "Overall, insurance premium and cost-sharing subsidies are roughly 0.4 percent of non-expansion states' gross domestic product, while they are roughly 0.15 percent of GDP in expansion states."

For the full report, click here.

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