The American Health Care Act: economic and employment consequences for states

• Published in: Issue brief (Commonwealth Fund) Vol. 17; p. 1
• Main Authors: Ku, Leighton, Steinmetz, Erika, Brantley, Erin, Holla, Nikhil, Bruen, Brian K
• Format: Journal Article
• Language: English
• Published: United States 01.06.2017
• Subjects: Employment - legislation & jurisprudence; Employment - statistics & numerical data; Employment - trends; Forecasting; Health Care Reform - legislation & jurisprudence; Humans; Insurance Coverage - legislation & jurisprudence; Insurance Coverage - statistics & numerical data; Insurance Coverage - trends; Insurance, Health - legislation & jurisprudence; Insurance, Health - statistics & numerical data; Insurance, Health - trends; State Government; Unemployment - statistics & numerical data; Unemployment - trends; United States
• ISSN: 1558-6847

ISSUE: The American Health Care Act (AHCA), passed by the U.S. House of Representatives, would repeal and replace the Affordable Care Act. The Congressional Budget Office indicates that the AHCA could increase the number of uninsured by 23 million by 2026. GOAL: To determine the consequences of the AHCA on employment and economic activity in every state. METHODS: We compute changes in federal spending and revenue from 2018 to 2026 for each state and use the PI+ model to project the effects on states’ employment and economies. FINDINGS AND CONCLUSIONS: The AHCA would raise employment and economic activity at first, but lower them in the long run. It initially raises the federal deficit when taxes are repealed, leading to 864,000 more jobs in 2018. In later years, reductions in support for health insurance cause negative economic effects. By 2026, 924,000 jobs would be lost, gross state products would be $93 billion lower, and business output would be $148 billion less. About three-quarters of jobs lost (725,000) would be in the health care sector. States which expanded Medicaid would experience faster and deeper economic losses.