Harvard Economist Estimates Health Repeal Would Destroy Up To 400,000 Jobs Per Year Over Decade

Just as House Republicans gear up to repeal the “job killing” Affordable Care Act, the Department of Labor is reporting that the U.S. economy added 103,000 jobs last month, pushing the jobless rate down to a 19-month low of 9.4 percent.

In fact, since President Obama signed health reform into law on March 23, 2010, the economy has created approximately a total of 1.1 million new jobs in the private sector. One-fifth of the new jobs — over 200,000 — have been in the health care industry. Nevertheless, Republicans have spent the week decrying health reform as “job killing” legislation. Watch a compilation:

Aside from the fact that increasing access to health services will create thousands of jobs in the health care sector, Harvard economist David Cutler argues in a new paper released this morning that repealing the health law would reverse these gains and could destroy 250,000 to 400,000 jobs annually over the next decade. Eliminating the law would increase health care costs and cause employers to reduce wages and cut jobs for those employees who already receive minimum wage or are in fixed contracts. From the report:

Figure 3 shows the net impact of repealing health reform on total employment. The baseline estimates show that 250,000 jobs will be lost annually if health reform is repealed. Annual job losses would average 400,000 using the greater estimate of 1.5 percentage point cost increases annually resulting from repeal.

Employers may be anxious about some of the new requirements, but many are already benefiting from the law. A growing number of employers are taking advantage of the tax credit that allows businesses with fewer than 25 workers and average wages under $50,000 to deduct up to 35% of the cost of the premiums they provide for their employees and many are receiving money from the law’s reinsurance program, which assists employers with retiree health costs. In 2014, small businesses will be able to use the new health insurance exchanges to pool resources and lower costs by covering their workers through a larger risk pool. All this would free up dollars that could then be used for job creation.


As Steve Pearlstein points out, “what’s particularly noteworthy about this fixation with ‘job killing’ is that it stands in such contrast to the complete lack of concern about policies that kill people rather than jobs.” “Repealing health-care reform, for instance, would inevitably lead to thousands of unnecessary deaths each year because of an inability to get medical care,” he says. “There is an unmistakable redbaiting quality to the “job-killing” rhetoric, a throwback to the McCarthy era.”