Obamacare repeal costs: 3 million jobs gone, $1.5 trillion in lost gross state product

Spending less by getting rid of Obamacare could end up costing a whole lot more.

Up to 3 million jobs in the health sector and other areas would be lost if certain key provisions of the Affordable Care Act are repealed by Congress, a new report said Thursday.

At the same time, ending those provisions could lead to a whopping $1.5 trillion reduction in gross state product from 2019 through 2023, according to the study.

"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," said Leighton Ku, director of the Center for Health Policy Research and professor at the Milken Institute School of Public Health at George Washington University.

Ku is the lead author of the report, which was issued by the Milken Institute and the Commonwealth Fund.

The report comes as President-elect Donald Trump and the new Congress are moving toward repealing parts of the ACA through the budget reconciliation process.

"The immediate and most visible effect of ACA repeal would be the loss of coverage and access to care for millions of people who have gained insurance because of the law," said Sara Collins, vice president for health-care coverage and access at the Commonwealth Fund.

"This study points to even larger potential economic effects that would be detrimental to the health and well-being of millions more," Collins said.

The estimate of job and state product losses are based on a scenario in which Congress defunds federal subsidies that most Obamacare customers receive to help lower their monthly insurance premium costs, and also gets rid of funding to cover adults who became newly eligible for Medicaid under the ACA.

Repealing both provisions would save the federal government $140 billion in health-care spending, the report found. And as that funding spigot dried up, it would lead to job losses and a drop in gross state product, the report said.

The study notes that most of the federal funding for Obamacare flows to hospitals, health clinics, pharmacies and other medical providers, who in turn hire and pay staff and purchase goods and services.

The biggest job losses would occur in California, with 334,000 lost jobs, Florida, with 181,000 lost jobs, Texas, with 175,000 lost positions, and Pennysylvania, New York and Ohio, each of which would lose more than 125,000 jobs, the report estimates.

One-third of the job losses would be in the health-care sector, according to the report. The remaining two-thirds of job losses are expected to come from construction, real estate, retail, finance and insurance.

As with other reports estimating the effects of Obamacare repeal, the economic downsides could be mitigated, or completely offset by a replacement plan for the ACA.

But so far, Trump and the Republican-led Congress have not committed to such a plan. So researchers have been unable to estimate the ultimate effects of a replacement plan.

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