Report: Obamacare repeal could cost the United States 1.2 million jobs

States that would lose the most jobs include Arizona, West Virginia, and Oregon.

Californians join health care workers at a rally to save the Affordable Care Act across the country outside LAC+USC Medical Center in Los Angeles, Sunday, Jan. 15, 2017.
Californians join health care workers at a rally to save the Affordable Care Act across the country outside LAC+USC Medical Center in Los Angeles, Sunday, Jan. 15, 2017.

A repeal of the Affordable Care Act, or Obamacare as it is popularly known, could reduce job growth by almost 1.2 million in 2019, according to a new report from the Economic Policy Institute. Although Republicans, who voted in favor of a repeal, say that cutting taxes associated with Obamacare would stimulate the economy, the report found that cuts for the ultra-wealthy are simply not enough, and would actually slow economic growth.

The job losses would be the result of a reduction in low-income and middle-income Americans’ disposable income. When Americans don’t have to pay higher subsidies and out-of-pocket health care expenses, they tend to spend more. More than three-fourths of the jobs gained by the expansion of Medicaid were not in the health care sector.

Fifty-seven percent of tax cuts related to the repeal of Obamacare would accrue to the top 1 percent of American income earners, according to The Tax Policy Center. The other 43 percent of the tax cuts would be more evenly spread out among income levels, according to Josh Bivens, research and policy director at the Economic Policy Institute.

Since the tax cuts are disproportionately going to the wealthy, who tend to save much of their extra disposable income, Americans will not feel any great economic stimulus from eliminating them, said Bivens.


“We still have businesses and governments in this economy not spending enough money to keep everybody fully employed, and if you look at projections over the next couple years for the economy, we are still going to be pretty demand constrained going into 2019,” Bivens explained. “There is going to be very little opportunity for the Federal Reserve to do anything to counteract that.”

The states that are most affected by these job losses include Kentucky, West Virginia, and Louisiana, which have particularly large energy sectors. For this reason, if energy prices stay low, it’s unlikely that these states will weather these job losses well, Bivens said.

“At the moment, [energy-driven states] are not doing great. You’ve got pretty low prices for coal and gas and, so that tends to hurt states that are pretty energy dependent. So those are states I would argue can’t afford to have much more piled on top of them,” Bivens said. “Maybe we have a much higher price on gas and goal in 2019 and they will be more able to weather it, but looking at today, some of them, like Kentucky, really are going to suffer a disproportionate burden from the ACA repeal.”

Earlier this month, Congress voted to pass a budget resolution instructing committees to write legislation that would dismantle much of the ACA. It would take years for Americans to actually feel the effects of that repeal, which is why EPI focused on the year 2019.


But it’s unclear how Republicans will proceed now that they finally have the opportunity to kill off Obamacare. On Friday, The Washington Post reported that Congressional Republicans have many doubts about repeal. A recording of a meeting between Republican lawmakers showed that they were worried about the political fallout of eliminating a popular law that has provided insurance to millions of Americans.

In the recording, Congressman Tom McClintock (R-CA) said, “We’d better be sure that we’re prepared to live with the market we’ve created … That’s going to be called Trumpcare. Republicans will own that lock, stock and barrel, and we’ll be judged in the election less than two years away.”