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Repealing Obamacare Would Cost More Than 1.1 Million American Jobs

January 31, 2017, 10:04 PM UTC
U.S. President-elect Donald Trump meets with Speaker of the House Paul Ryan on Capitol Hill in Washington
U.S. President-elect Donald Trump (L) meets with Speaker of the House Paul Ryan (R-WI) on Capitol Hill in Washington, U.S., November 10, 2016. REUTERS/Joshua Roberts - RTX2T38I
Joshua Roberts—Reuters

Donald Trump’s promise to be the “greatest jobs president God ever produced” could brush up against his antipathy to the Affordable Care Act, according to a new analysis.

An Economic Policy Institute (EPI) study released Tuesday (incidentally, the last day of Obamacare enrollment, potentially ever) finds that repealing former President Barack Obama’s signature health law would lead to nearly 1.2 million fewer jobs in America by 2019. In fact, there would be fewer jobs in every single U.S. state.

EPI calculated how much of a boon that lower taxes stemming from an Obamacare repeal would be for economic growth versus the harms from spending and benefit cuts. While job gains from tax cuts would number at around 154,000 nationally, big spending cuts would cost more than 1.3 million job losses, according to report author Josh Bivens, EPI’s director of research and an expert in macroeconomic studies.

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Bivens says that the combination of Obamacare’s Medicaid expansion and subsidies for buying private insurance and lowering out-of-pocket costs have provided significant enough safety net boosts across the country that repealing the law must be examined on a macro level that affects economic activity and the broader job market. For one, he argues, there’s considerably more slack in the job market than the topline 4.7% uninsurance rate suggests, and states’ budget cuts make the situation even more dicey.

Unsurprisingly, states that would face some of the biggest jobs shortfalls under Obamacare repeal are poorer ones that benefited significantly from the Medicaid expansion, which has provided an enormous boost to the working poor.


“When the Medicaid expansion and insurance and cost-sharing subsidies were implemented in 2014, they provided a noticeable (and needed) boost to states’ economies and job markets. Even with the fiscal boost provided by the ACA, overall fiscal policy at both the state and federal level was extraordinarily austere in the post-2011 portion of the recent economic recovery, relative to previous economic recoveries,” writes Bivens, adding that “repealing the ACA would constitute a contractionary fiscal shock going forward that would reduce the pace of economic growth and cost jobs.”

A recent Congressional Budget Office (CBO) report found that repealing Obamacare without a suitable replacement would lead to 18 million more uninsured Americans in the next year alone and hike premiums 20% to 25% in the short-term (and far more in the long-term).

While the new GOP-controlled Congress has set the Obamacare repeal process in motion, there’s still no set consensus on a replacement plan for the law or a final repeal vote.