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Study says health bill passed by the House would cost Kentucky 16,500 jobs in the next decade

By Melissa Patrick
Kentucky Health News

A study says that if Congress and President Trump were to enact into law the health bill passed by the House, the nation would lose nearly 1 million jobs, 16,500 of them in Kentucky, in the next decade.

The study is from the Milken Institute School of Public Health at the George Washington University in Washington, D.C., and The Commonwealth Fund, a New York-based research foundation.

Their analysis of the American Health Care Act predicts it would initially increase the number of jobs and improve the economy because of the tax cuts that go into effect immediately, but those gains would soon be lost. “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,” Leighton Ku, director of the Center for Health Policy Research at GWU and lead author of the report, said in a news release. “The downturn would hit the health-care sector and states that expanded Medicaid the hardest.”
Click here to link to an interactive map that shows the predicted impact of the ACHA on jobs.
Kentucky is one of the 31 states that expanded Medicaid under Obamacare to those who earn up to 138 percent of the federal poverty line. Almost 470,000 Kentuckians gained health insurance through the expansion. Only 82,000 are enrolled in Obamacare plans subsidized by federal tax credits.

The study predicts Kentucky would initially see an increase of 8,500 jobs, but between 2018 and 2026, when the Medicaid spending cuts and reduced funding for cost-sharing subsidies kick in, the state would lose almost 17,000 jobs, with 10,500 of them in health care. The report adds that Kentucky is one of 17 states where the number of health-care jobs would fall immediately.

Likewise, the study forecasts that Kentucky's gross state product, the value of goods and service produced in the state, would initially grow by $800 million and see an increase in business output of $1.5 billion, but by 2026 the GSP would be $1.6 billion lower and business output $2.6 billion less.

"The primary cause of the loss of jobs and harm to state economies is the large reduction in funding for health care, particularly cuts in Medicaid funding and reduced funding for tax subsidies to help people purchase health insurance," says the release.

Senate Republicans are working on their version of a bill to repeal and replace Obamacare and many of the provisions in the House bill are expected to carry over into it. But because the Senate bill is being drafted behind closed doors it remains uncertain what they will be.

The study said it looked at the potential economic effects of the AHCA based on "changes in federal funding gained or lost to states, consumers and businesses." Its estimates are based on projections from the nonpartisan Congressional Budget Office, which said 23 million fewer people would have health insurance in 2026 under the AHCA. A Centers for Medicare and Medicaid Services actuary concluded that the number of uninsured in 2026 would be closer to 13 million -- far fewer than the CBO report.

The report recognizes that conservatives want to reduce federal spending to lower the deficit, but says this strategy decreases jobs at the state level.

“Federal health funds are used to purchase health care. Then, fiscal effects ripple out through the rest of the economy, creating employment and other economic growth," says the report. “Health funds directly pay hospitals, doctors’ offices, and other providers; this is the direct effect of federal funding. These facilities use revenue to pay their employees and buy goods and services, such as rent or equipment; this is the indirect effect of the initial spending." The report adds that health-care employees and businesses then use their incomes to purchase consumer goods.

The authors note that the analysis has many limitations, including: the uncertainty around whether the AHCA or an alternative plan will be enacted into law; the inability to account for other legislation that would affect economic growth or employment; the flexibilities that the AHCA grants to states that could underestimate or overestimate individual state findings; and President Trump's budget that calls for an additional $610 billion in Medicaid cuts beyond those called for in the AHCA.

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