Repeal of the Affordable Care Act would be devastating not only for DC residents who may lose health insurance, but also for the entire DC economy. It would lead to a loss of up to 8,000 jobs in health care and beyond and $11.3 billion in business output in the District by 2023, according to a recent study.
About one in four jobs lost would be in the health care field, but there also would be losses throughout the private sector, including construction and real estate, retail, finance and insurance. Federal and DC government jobs would also be affected.
Shrinking support of health care would reduce DC’s business output (combined transactions at the production, wholesale, and retail levels) by $11.3 billion between 2019 and 2023. This in turn would lead to a $119 million hit to DC’s tax collections.
How does a federal health program affect jobs and state economies? By 2019, health care will be 18.5 percent of the nation’s economy. Major changes to such a large industry would affect other parts of the economy as well. When health care providers are paid for services, much of this is used for paying staff, as well buying medical equipment and supplies, or maintaining hospital or clinic facilities. In turn, this puts money in workers’ pockets that they use for goods and services that eventually become income for other businesses. Without that cash flow, it creates a ripple effect with major economic consequences.
The study, by the Commonwealth Fund and the GWU Milken Institute School of Public Health, examined the state-by-state effect of an ACA repeal on employment and economic activity. It focused on two main components of the ACA, federal premium tax credits that make marketplace coverage more affordable, and federal payments to states for expanding eligibility in their Medicaid programs.
The District has taken advantage of both. It established a local marketplace known as DC Health Link that currently serves over 21,000 individuals and more than 3,700 small businesses. It also expanded Medicaid beyond the federal requirements, covering individuals with incomes up to 210 percent of the poverty line, or $24,507 for a single person. Through these efforts, DC’s uninsured rate is now one of the lowest in the nation.
The ACA has had a positive effect on coverage gains in DC, which Mayor Bowser shared in a recent letter to Congressional Republicans urging caution on repeal. She warned that repeal could cost the District more than $600 million per year, if the city fully backfilled for lost federal assistance.
Being a national leader in expanding access to health care has been a boon to the DC economy. It is yet another reason to be concerned about any efforts to radically scale back the health care gains brought by the Affordable Care Act.
