AHCA could lead to 725,000 fewer healthcare jobs

Twitter icon
Facebook icon
LinkedIn icon
e-mail icon
Google icon

The Republican-sponsored American Health Care Act (AHCA) could “trigger an economic downturn in nearly every state,” according to a new report from George Washington University’s Milken Institute School of Public Health and the Commonwealth Fund, with the majority of the job losses coming from the healthcare industry.

The report estimated the Affordable Care Act (ACA) replacement plan would have an immediate impact on healthcare sector employment, which would fall by 24,000 jobs nationwide in 2018. The dropoff would accelerate to 391,000 jobs lost by 2020, when the House version of the AHCA reduces the enhanced federal matching rate for expanded Medicaid eligibility. By 2026, the number of healthcare jobs would have been reduced by 725,000.

The coverage-related changes made by the AHCA, such as the estimated 23 million more people without health insurance by 2026, would have caused greater job losses, but they are partially offset by the AHCA’s repeal of certain ACA taxes, such as the medical device tax.

Throughout all sectors of the economy, the report estimated 924,000 jobs would be lost if the bill becomes law.

“The AHCA would initially cause a brief spurt of economic growth from tax cuts, which primarily help those with high incomes,” said Leighton Ku, PhD, lead author of the report and director of the Center for Health Policy Research at the Milken Institute. “However, cuts in funding for Medicaid and health subsidies then begin to deepen, triggering sharp job losses and broad disruption of state economies in the following years.”

Some states would initially see employment increase to due to growth spurred by the AHCA’s tax cuts, led by Texas’ 8,300 additional healthcare jobs. States that expanded Medicaid will have “deeper and faster” job losses, according to the report, though non-expansion states Florida and Maine will be among the six to lose healthcare jobs beginning in 2018. The greatest immediate declines would be seen in Michigan (17,400 jobs lost in 2018) and Illinois (15,700 jobs lost), due to having state laws which automatically cancels expanded Medicaid eligibility if the federal matching rates change. Arkansas, Indiana, New Hampshire, New Mexico and Washington have similar laws and would see quicker job losses.

By 2026, healthcare organizations in every state will have lost healthcare jobs. The five states with the largest job losses would be:

  1. California (64,200 fewer jobs)
  2. New York (61,800)
  3. Florida (54,100)
  4. Pennsylvania (52,500)
  5. Texas (40,100)

The law doesn’t take into account any changes being made to the AHCA by Senate Republicans, which have not publicly released its version of the legislation and don’t intend to, according to Axios, instead sending the finalized draft straight to the Congressional Budget Office.