While healthcare has continuously been the leading job-producer, that may change with the incoming federal administration and GOP-controlled Congress that has pledged to repeal the Affordable Care Act.
A report released Friday by the Commonwealth Fund and the Milken Institute School of Public Health at the George Washington University found that repealing key provisions of the ACA, including the insurance premium tax credits and Medicaid expansion, could lead to 2.6 million people losing their jobs in 2019. By 2021, nearly 3 million jobs in healthcare and other sectors could be lost.
A third of those lost jobs would be in healthcare, according to the report. If the ACA is repealed and millions of people lose insurance, hospitals and other healthcare providers would see uncompensated care soar, which would lead to lost revenue and consequently, job losses.
“Repealing key parts of the ACA could trigger massive job losses and a slump in consumer and business spending that would affect all sectors of state economies,” the Milken Institute's Leighton Ku, the lead author of the study, said in a statement. “Cuts in federal funding would not only harm the health care industry and its employees but could lead to serious economic distress for states, including a $1.5 trillion reduction in gross state product from 2019 to 2023."
While job growth in the healthcare sector has helped reduce the unemployment rate, it also sped up healthcare spending. The nation's healthcare sector spent $3.2 trillion in 2015, up 5.8% from the year before, driven by coverage expansions under the ACA that led to higher spending for private health insurance, hospital care, physician and clinical services, Medicaid and prescription drugs. As the demand for care under the ACA increased, healthcare organizations responded by adding jobs to cater to those newly insured. Moreover, more care was being reimbursed, so hospitals had more money to spend on hiring.
President-elect Donald Trump and the Republican-controlled Congress will inherit a much healthier economy than when President Barack Obama first walked into the Oval Office.
The unemployment rate was 7.8% in January 2009. The U.S. has experienced 75 straight months of job growth — the longest streak since 1939. The rate of unemployment is also much lower than the 10% peak during Obama's tenure.