AHCA could mean 725K fewer healthcare jobs by 2026


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Dive Brief:

  • The American Health Care Act (AHCA), as it was passed in the House, would result in the loss of 924,000 jobs over 10 years and spark economic downturns in every state, according to research by the George Washington University Milken Institute School of Public Health and The Commonwealth Fund.
  • The healthcare sector would be hit the hardest, with 725,000 jobs lost by 2026. There would be fewer healthcare jobs immediately in 17 states. The states that would be most affected overall include New York, Pennsylvania and Florida.
  • The primary cause of the job disappearances and state economic downturns would be cuts to healthcare funding, such as more than $800 billion to Medicaid, and lower premium subsidies.

Dive Insight:

The analysis is of the House version of the bill, and the Senate is expected to make changes when it brings its own version up for a vote. But with those negotiations going on behind closed doors, there is not enough information to makes estimates based on the Senate bill.

The report is a warning call to the healthcare industry and another black mark on the increasingly unpopular AHCA. The bill is already opposed by most major industry groups. They balk at the huge cuts to Medicaid and the Congressional Budget Office estimates up to 23 million people would lose coverage.

The threat of jobs losses could become another rallying cry. In fact, healthcare executives shaken by the potential for repeal of the Affordable Care Act (ACA) are already scaling back hiring and new projects in the face of uncertainty. Former CMS Administrator Andy Slavitt said a poll he conducted found nearly 40% of executives said they are slowing hiring and 31% are cutting capital expenses.

Healthcare job growth spiked after the passage of the ACA, which the AHCA seeks to replace. The ACA helped create about 240,000 jobs in the industry, and employment increased from an average of 1.7% in 2010 to 2.5% from 2014 to 2016. But that trend has tempered. Healthcare has averaged 22,000 job gains a month so far this year. The average monthly gain in 2016 was 32,000.

The AHCA phases out Medicaid expansion, which has been an economic boon for states that decided to expand. The authors of the latest report said those states would be hit hardest in financial terms by the bill.

“Hospitals, health systems, clinics and pharmacies might be forced to close or lay off staff as federal funding for healthcare is cut and the number of uninsured patients grows,” the researchers wrote.

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