There’s been a lot of talk recently, mainly from Ohio’s grumpy term-limited governor, about another economic recession coming to Ohio. Gov. John Kasich has worried aloud about shrinking state revenues even though he proclaimed last year running for president that Ohio was doing just fine.
As Plunderbund has pointed out numerous times already, assignment of blame for Mr. Kasich’s Chicken Little cries of a coming recession should start in part with his income tax giveaway policies that have consistently short-changed state coffers without delivering a corresponding economic miracle. The result of Ohio’s wealthiest paying lots less while the least well off pay more presents a recipe that clearly isn’t working.
Kasich Recession Worries Can Come True
But the governor’s warning of a coming recession may yet come true if his like-minded Republican members in Congress do what they’ve promised to do, repeal the Patient Protection and Affordable Care Act, a.k.a. Obamacare. Since Republicans across the board have no concrete proposals about what to replace it with, analysis of that coming horror show will be delayed until such time as they can provide real math to match their lofty rhetoric of better healthcare for less.
In the meantime, an analysis by The Milken Institute School of Public Health at the George Washington University and The Commonwealth Fund presents a clear and present danger scenario about how tens of thousands of jobs in Ohio could evaporate with the disappearance of Obamacare.
Ohio One Of Ten States Hardest Hit By Obamacare Repeal
The review estimates that job losses to the tune of 126,000 in Ohio would occur in 2019 due to a loss of $140 billion in federal funding for tax credits used to subsidize premium costs for people covered by private insurance under the health law. Moreover, federal funds used to expand Medicaid to millions of able-bodied Americans with incomes below the poverty level will blow a mile-wide hole in the state’s lackluster economy.
“A repeal of key provisions of the Affordable Care Act could lead to significant economic disruption and substantial job losses in every state, according to new research,” leads off the report’s ominous introduction. “In 2019 alone, 2.6 million people could lose their jobs. These losses could rise to nearly 3 million positions in health care and other sectors by the year 2021,” says this first-of-its-kind study.
Lead author of the report, Leighton Ku, Ph.D., director of the Center for Health Policy Research and professor of health policy and management at the Milken Institute, said 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. “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.”
Republican loyalists are downplaying the terrible economic impacts of what President-elect Donald Trump and allied Congressional Republicans plan to do since it blows up millions of jobs instead of creating millions of new jobs as Mr. Trump promised throughout his magic trick campaign.
For a party that whined endlessly about Obama Administration uncertainties, the high anxiety this repeal plan creates for millions of Americans covered by the ACA is a tour de force of political hypocrisy. For the record, 230,254 Ohioans have either re-enrolled or signed up for private health coverage this year during the initial open enrollment period, government statistics show. More than 716,000 Buckeyes who didn’t have healthcare coverage before the ACA are now covered by expanding Medicaid through Obamacare.
The study says that hospitals and health care providers, especially those in rural areas, would see costs to treat the uninsured skyrocket by $1.1 trillion between 2019 and 2028.
One economic think tank here in Ohio says repealing Obamacare would make it harder for many of the uninsured to hold down a job, delivering a real hit to the broader economy. Wendy Patton, senior project director for Policy Matters Ohio, commented on it in a published report. “The ability to get coverage not only helps the individual by improving their health so they are more financially secure, it also stabilizes their communities and therefore the statewide economy,” Patton said.
Report Research Highlights:
- About 2.6 million jobs lost across all 50 states and the District of Columbia in 2019. Job losses would affect every state, but 10 would suffer the biggest hits: California (334,000 jobs), Florida (181,000), Texas (175,000), Pennsylvania (137,000), New York (131,000), Ohio (126,000), Illinois (114,000), Michigan (102,000), New Jersey (86,000), and North Carolina (76,000).
- One-third (912,000) of the total 2.6 million job losses would be concentrated in health care; nurses, health technicians, and other medical personnel would likely be laid off in 2019. The remaining two-thirds of losses would be in other industries, including construction, real estate, retail trade, finance, and insurance.
- Gross state product, the state equivalent of national gross domestic product, could fall by $256 billion in 2019 alone. From 2019 to 2023 that same economic indicator could drop by $1.5 trillion.
- The resulting economic disruption could trigger reductions in state and local tax revenues, amounting to $48 billion lost over five years.
- State and local governments would get hit with shrinking tax revenues at the same time they are facing increased demand for health care services from the millions of people losing their health insurance. States could be juggling painful choices about what services to cut or whether to raise tax rates to maintain a safety net for their residents.
- All states could suffer economic distress if the Medicaid expansions are cancelled—even the 19 states that have not expanded the program. That’s because the economic benefits of Medicaid expansion flow across state lines: businesses and individuals who benefit from the economic growth buy goods and services not only in their own states but also in other expansion and nonexpansion states.
The report was supported by a combination of funds from The Commonwealth Fund, the Geiger Gibson RCHN Community Health Foundation Research Collaborative and the Milken Institute SPH.