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News from EPI Repealing the Affordable Care Act will cost 1.2 million jobs nationally

A new report by EPI Research Director Josh Bivens finds that repealing the Affordable Care Act (ACA) will cost the economy 1.2 million jobs in 2019, with jobs lost in every state. The report looks at the effects of cuts to both spending and taxes that would occur under a full repeal.

The $109 billion in spending cuts would have a disproportionally negative effect on states with the highest share of low and middle-income families and those states that took up the ACA Medicaid expansion, while the $70 billion tax cuts would disproportionately benefit those states with the largest share of households in the top 1 percent. Because low- and moderate-income households tend to spend a much higher share of marginal increases in disposable income, the overall effect of ACA repeal would be less spending and slower demand growth across all states.

“If the ACA is repealed, working peoples’ purchasing power will be significantly reduced, which means they will spend less on goods and services in the local economy,” said Bivens. “Job growth will be constrained due to this decrease in spending. Any spending boost from lower taxes as a result of ACA repeal would be swamped by spending cutbacks low- and middle-income families would have to undertake after losing access to Medicaid or subsidies in insurance exchanges.”

18 states would see employment losses greater than 0.5 percent of their current state under-65 population: New Mexico, Kentucky, Oregon, Montana, West Virginia, Rhode Island, New Jersey, Colorado, Arizona, Washington, Louisiana, Nevada, North Carolina, Vermont, Maryland, Ohio, Michigan, and Delaware. While all states would lose jobs, states whose economies would be harmed the least are those that never took up the Medicaid expansion, as well as those with a larger share of households in the top 1 percent.

“The most important reason to oppose repealing the ACA is the 20 million Americans who would lose health insurance,” said Bivens. “But layered on top of this loss is a potential macroeconomic shock that would likely significantly affect job growth.”

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