Economy

How Repealing the ACA Could Affect Jobs

February 25th 2017

By:
Kyle Jaeger

Up to 20 million Americans could lose their health care insurance if the Affordable Care Act (ACA) is repealed, according to government estimates. But that wouldn't be the only consequence of a repeal, according to a January 2017 report from the liberal-leaning Economic Policy Institute (EPI).

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Repealing the ACA would mean about $109 billion in federal spending cuts — in addition to $70 billion in tax cuts — and those economic changes would dramatically slow job growth nationwide, causing the loss of 1.2 million jobs by 2019, the report found.

"If the ACA is repealed, working peoples’ purchasing power will be significantly reduced, which means they will spend less on goods and services in the local economy," Josh Bivens, EPI's research director, wrote in a press release. "Job growth will be constrained due to this decrease in spending."

"Any spending boost from lower taxes as a result of ACA repeal would be swamped by spending cutbacks low and middle income families would have to undertake after losing access to Medicaid or subsidies in insurance exchanges," Bivens added.

Here's how many jobs would be lost in your state.

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Though every state would see job losses if the ACA is repealed, states that have higher proportions of lower and middle class people — especially in states that accepted Medicaid expansion — would see the greatest impact on employment. That's because the ACA reduced health care expenses for these families. Politifact reports that those making $50,000 or less annually ended up saving an average of $212 per month under the health care law, giving them greater spending power.

If the repeal goes forward without a replacement, those families would end up putting more of their income toward health insurance, and not consumer goods. Over time, that will lead companies to tighten their belts and hire fewer people, which will lead to job loss, the EPI determined. That said, Republican lawmakers are promising a replacement plan, so it is unclear whether these economic repercussions would come to fruition.

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"The most important reason to oppose repealing the ACA is the 20 million Americans who would lose health insurance," Bivens said. "But layered on top of this loss is a potential macroeconomic shock that would likely significantly affect job growth."