ASU study says repeal of Obamacare would cost state nearly $5 billion

A study from the W.P. Carey School of Business estimates Arizona could lose 62,000 jobs, along with billions of dollars, if Obamacare were to be repealed

Arizona could lose nearly $5 billion and 62,000 jobs if federal funding for the Affordable Care Act were cut, according to a new study from the W.P. Carey School of Business.

The study, from the Seidman Research Institute at ASU’s School of Business and commissioned by the Children's Action Alliance, shows a worst-case scenario in which the Affordable Care Act is repealed and not replaced. Repealing and replacing the Patient Protection and Affordable Care Act, also known as Obamacare, is a top priority for Congressional Republicans and the Trump Administration.

Lee McPheters, a research professor of economics in the W. P. Carey School of Business, said the study is somewhat specialized because it isn’t a true prediction of what will happen.

“In essence this is not a projection of ‘here’s what’s going to happen because we know what congress is going to do,’ it is saying what would happen if that federal support for healthcare was taken out of the Arizona spending stream,” McPherters said. “(The study) is in this sense kind of a snapshot of what could happen in Arizona after you pull $4 billion out the health care spending stream.”

Of the approximately 62,000 jobs that could be lost in the fiscal year 2018, around 29,000 of them would be in the health care employment sector, according to the study. Other jobs lost would be from services that health care providers support, according to McPheters.

“When that $4 billion is pulled out of the economy there is an effect on health care jobs and then of course in the health care industry you have suppliers that would be affected, you have people that have jobs in health care that would have less to spend,” McPheters said. “If their job totally goes away they would have to find another job so this is where we get that 62,000 jobs lost as a result of removing the $4 billion dollars from the economy.”

For any sort of replacement to not affect Arizona, the amount of federal funding for Medicaid would have to be the same amount of money as under the Affordable Care Act, McPheters said.

“What we’re looking at is a ‘here today, gone tomorrow’ view of federal support for Arizona healthcare and we don’t know what the replacement would be,” McPheters said

Will Humble, former director for the Arizona Department of Health Services and future executive director for the Arizona Public Health Association, said the biggest question is how a replacement would handle Medicaid, which was expanded under Obamacare.

“A big chunk of the health disparities we have in this country are among low-income folks who have their insurance through Medicaid, the Affordable Care Act had a lot to do with Medicaid, there was big portions of the Affordable Care Act that talked directly about Medicaid,” Humble said. "...There’s no single definition of what replacement looks like.”

Humble said the replacement would also have to answer questions for the marketplace under a replacement.

“That’s a big, open question, what would be the impact depending on what replacement means and whether it affects just private insurance, work insurance or whether it includes Medicaid as well,” Humble said.

Swapna Reddy, clinical assistant professor at the ASU College of Health Solutions, said the study looks at the growth of the health care industry in the last two decades and draws their conclusions partially from that.

“Some of the most important injections of funding to Arizona that have come via the ACA are mostly a result of tax credits for lower income Arizonans that buy subsidized insurance coverage through ACA marketplaces and through the expansion to our Medicaid program,” Reddy said in an email.

Reddy said the study expanded the argument for protecting the Affordable Care Act.

“Improving affordable access to health care not only benefits patients and their families but also the professionals who provide care and all of the industries that rely on the health sector to survive and thrive,” Reddy said. 


Reach the reporter at maatenci@asu.edu or follow @mitchellatencio on Twitter.

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