02.08.17

By: Ken Alltucker
Source: The Republic

'Obamacare' repeal could kill 62,000 Arizona jobs, study says

If Arizona loses all Affordable Care Act funding now funneled to patients, doctors, insurers and hospitals, it would create a nearly $5 billion hole in the state's economy and cost more than 62,000 jobs next year, according to a new report.

That is the worst-case scenario outlined in a report commissioned by Children's Action Alliance and completed by the Seidman Research Institute at Arizona State University. The report projected a slightly smaller dip in job creation and economic impact if federal funding disappears but the state keeps its current funding level for health care or redirects similar spending elsewhere.

Either scenario, however, could create something that Arizona has not experienced as far back as health job statistics reach —  a "health-care recession," according to ASU economist Lee McPheters.

"Health care over the last 20 years has been the most dynamic sector of the entire economy," said McPheters, director of the JPMorgan Chase Economic Outlook Center at ASU's W.P. Carey School of Business. "This is the only industry that has grown uninterrupted since 1965."

The Affordable Care Act, also known as "Obamacare," has infused significant funding into Arizona, mainly through the expansion of Medicaid and tax credits that help low- to moderate-income earners purchase subsidized insurance coverage on the federal marketplace.

If ACA-related federal and state funding is removed from the state's economy, the report said, it would cause Arizona to lose 29,461 health-care jobs in 2018. That loss of generally higher-wage health jobs would ripple through other industries, such as health suppliers and service sectors, resulting in 62,659 fewer jobs statewide, according to the report.

That would reduce the state's "gross state product" by nearly $5 billion and reduce personal income by nearly $3.5 billion.

The report said the absence of ACA funding could cost nearly 718,000 jobs and more than $60 billion to the state's economy over the next decade.

The report does not assume the federal spending that comes to Arizona would be spent on other health programs or be replaced with an Obamacare alternative. Nor does it count any potential savings from eliminating ACA taxes on insurance plans, medical devices or individuals.

Children's Action Alliance officials said the organization commissioned the report to give Arizona's congressional delegation and state lawmakers a broader look at the potential economic impact of the health law's repeal.

"We are concerned about the impact on families, children and health care," said Dana Wolfe Naimark, CEO of Children's Action Alliance. "We hope this brings a broader understanding on how much Arizonans are currently counting on the provisions of the ACA and how much our economy has been affected by it."

There have been several national projections on how a repeal of the health-care law would trickle down to Arizona. For example, the Commonwealth Fund last month projected that a repeal would cost Arizona nearly 34,000 jobs by 2019, a more conservative estimate than ASU's projection.

Critics of the 2010 health-care law say it is not working. They cite as evidence Arizona's rising health premiums for Obamacare plans and the exit of all but two heath insurance companies on the federal marketplace.

Naimark, however, said the law has broader impact than the federal marketplace, and she pointed out that the vast majority of marketplace customers have benefited from higher tax credits that have offset rising premiums.

While Gov. Doug Ducey has advocated for repeal of the health law, he also urged Congress to adopt a transition period of two to three years that allowed people to continue to collect Obamacare subsidies to purchase health coverage.

Some Republican lawmakers have slowed down talk of an immediate ACA repeal without consensus on a replacement. Even President Donald Trump has recast expectations for a speedy repeal. However, some members of the House Freedom Caucus are pushing for a full repeal over the coming months.

In a letter last month to House Majority Leader Kevin McCarthy, Ducey's advisers warned that if Congress adopts a block-grant or per-capita funding formula for Medicaid, it could "result in the single largest transfer of risk ever from the federal government to the states."