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ACA Repeal Could Cost CA 209,000 Jobs

News  |  By Doug Desjardins  
   January 09, 2017

State hires former Obama AG as outside counsel to combat expected changes

This story originally appeared in California Healthfax.

As the GOP begins efforts to dismantle the Affordable Care Act (ACA), a new study predicts the state could lose more than 200,000 jobs if the ACA is repealed.

Repeal of federal healthcare reform could eliminate nearly 209,000 jobs and cost the California economy $20.5 billion a year, according to research by the UC Berkeley Center for Labor Research and Education.

The $20.5 billion in lost revenue would result from the elimination of approximately $5 billion in federal subsidies for people who buy health plans on Covered California and the loss of more than $15 billion in funding for Medicaid expansion, the study estimated.

The job-loss estimates were based on the jobs that were created when the ACA went into effect, said Laurel Lucia, a healthcare program manager at UC Berkeley and co-author of the study.

"Hospitals, clinics, and other providers staffed up to meet increased demand as a result of the ACA and our economic modeling software estimates that many of those jobs would be lost if the ACA is repealed," said Lucia.

CA Health Exchange Girds for Uncertain Future

The majority of the job losses would be in hospitals, physician offices, labs, outpatient and ambulatory care centers, nursing homes, dentist offices, and other healthcare settings, the report noted. The loss of these jobs would result in a ripple effect of job losses in other industries.

"Our analysis takes into account the multiplier effect," said Lucia. "When healthcare workers found new jobs, their income was circulated through the community multiple times."

Additional industries ranging from food service to janitorial services to accounting and other professions would also be affected, she said.

Poorer and rural areas, such as Merced and Tulare counties, would lose more jobs than other parts of the state, according to the report. These areas have a higher-than-average population enrolled in Medi-Cal due to Medicaid expansion, the largest single source of federal spending in the UC analysis.

Tulare County has the highest percentage of Medi-Cal enrollees, at 55% of the population, followed by Merced County with 51.5% and Imperial County with 50.6%, according to a study by the state's Department of Finance and Department of Health Care Services.

Cost of ACA Repeal: $1.7 Trillion in Uncompensated Care

The UC Berkeley study also noted that repeal of the ACA could include some benefits to offset the estimated loss of $20.5 billion in revenue.

The losses would be partially offset by limited economic gains from repeal of other provisions in the ACA. These include potentially $6.3 billion in tax cuts to California insurers and high-income households, and $1.3 billion in eliminated penalties for uninsured individuals.

Employers would save money by not offering affordable coverage, according to the research.

State Hires Former AG
To combat impending changes to the ACA and other policies proposed by the administration of president-elect Donald Trump, California lawmakers hired former U.S. Attorney General Eric Holder as an outside counsel.

Holder served as U.S. attorney general from 2009 to 2015 and is currently a partner at Covington & Burling, a Washington DC-based law firm that specializes in representing states and companies in lawsuits against the federal government.

"Having the former attorney general of the United States brings us a lot of firepower in order to prepare to safeguard the values of the people in California,” said state Sen. Kevin de Leon (D-Los Angeles).

Hiring Holder signals the state "is very serious" about defending the ACA, de Leon said.

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