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 Senate Draft ACA Replacement Bill a Big Job Loser, Says Report

New analysis by The Commonwealth Fund predicts steep job losses if the Senate version of Affordable Care Act (ACA) repeal-and-replace legislation ever becomes law.

The think tank’s latest report on the economic and employment effect of possible ACA replacement proposals focuses this time on the Better Care Reconciliation Act (BCRA), which if approved by the Senate and eventually the House (and signed by President Trump) would cause major declines for health care jobs by the year 2026, after an initial increase in employment in 2018.

“A brief spurt in employment would add 753,000 more jobs in 2018, but employment would then deteriorate sharply,” the report said. “By 2026, 1.45 million fewer jobs would exist, compared to levels under the current law. Every state except Hawaii would have fewer jobs and a weaker economy.”

Hardest hit would be employment in health care, with a projected 919,000 fewer health jobs. Across the spectrum of potential economic decline, the states that expanded the Medicaid program under the ACA would be especially hard hit.

“Our estimates are based on changes in federal funding gained or lost to states, consumers, and businesses. The BCRA significantly reduces federal funding for Medicaid. It lowers federal match funding for the District of Columbia and 31 states that expanded Medicaid, encouraging them to discontinue their expansions,” the report said.

In fact, the Congressional Budget Office has estimated that if enacted, the Senate legislation would reduce federal Medicaid spending by nearly $800 billion over 10 years (by 2026) and leave some 22 million who would have otherwise had health insurance coverage without it. These Medicaid changes would result from the BCRA giving states the option to either adopt per capita allotments for Medicaid or fixed block grants versus the open-ended system that exists today.

The report said beyond health care employment losses, 534,000 jobs would be lost in other industries, including construction and real estate, finance, retail trade, and public employment.

“These downward trends would continue after 2026. These losses are substantially worse than the estimated effects of the AHCA,” the report said, referring to the American Health Care Act, the House-approved version of ACA replacement legislation.

For state-level consequences of the Senate bill, the report focused on data for 10 states: Alaska, Florida, Kentucky, Maine, Michigan, Nevada, New York, Ohio, Pennsylvania, and West Virginia.

“In this analysis, states that expanded Medicaid tend to experience deeper and faster economic declines, although substantial losses occur even among nonexpansion states,” the analysis said. “Nine of the 10 states (all but Michigan) begin with positive economic and employment effects in 2018, but are worse off by 2026. Outcomes typically turn negative by 2022.

The states among the 10 analyzed that expanded Medicaid had deeper and faster job losses because they earned more federal funds under the ACA, giving them more to lose if the federal Medicaid matching rates were cut.

“In addition to cutting funds to states that expanded health insurance for low-income Medicaid populations, the bill also increases funding to states that did not expand Medicaid,” the report said. “Nonetheless, states that did not expand Medicaid, like Florida and Maine, experience job and economic losses after a few years. In fact, Florida [will have] the sixth-highest level of job loss in the nation by 2026.”

Access the report at https://tinyurl.com/y9o6ndpr.

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