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Governor Wolf Alarmed by Report on Job Losses from Federal Health Care Changes

June 14, 2017

Harrisburg, PA – Governor Tom Wolf today voiced serious concerns about a new report saying federal health care changes could mean the loss of the 85,000 jobs in Pennsylvania, the second most of any state in the country, and billions lost in both Pennsylvania’s gross state product and business output. According to the study’s profile of Pennsylvania, by 2026, the commonwealth will lose 84,900 total jobs, including 52,500 in the health sector, $8,900,000,000 in gross state product and $14,200,000,000 in business output.

Governor Wolf said today’s report from George Washington University and the Commonwealth Fund highlights the misguided path that Republican majorities in Washington are pursuing for Pennsylvanians and our economy.

“This report is just another example of the alarming approach Washington is pursuing on health care and our economy in the long term,” Governor Wolf. “The Republican proposal will raise costs for older Pennsylvanians, put coverage at risk for nearly a million Pennsylvanians, and strip important consumer protections away from nearly every health care consumer. But this report raises even more concerns about the long-term damage these health care cuts will have on Pennsylvania and the country.

“Unfortunately, every indication is that these impacts will only be delayed in the Senate Republican repeal of the Affordable Care Act. This report shows clearly that Medicaid is not just a lifeline for seniors, the disabled and those seeking substance use treatment, but our economy.”

From the report’s authors:

On May 4, 2017, the House of Representatives passed the American Health Care Act (AHCA, H.R. 1628) to partially repeal and replace the Patient Protection and Affordable Care Act (ACA, also known as Obamacare).

Key parts of the bill include:

  • Reducing federal funding for Medicaid, encouraging states to scale back expansions.
  • Restructuring Medicaid funding using per capita caps and block grants.
  • Eliminating individual tax penalties for not having health insurance and penalties for employers not offering coverage for employees.
  • Replacing income-related premium tax credits with age-based tax credits.
  • Repealing ACA taxes, predominantly benefiting people with high incomes and certain businesses.

This nonpartisan study by researchers at the George Washington University examines the potential economic and employment effects of AHCA for every state in the nation. Most tax cuts will occur immediately, increasing the federal deficit, while coverage-related federal spending cuts will phase in more slowly over time.

As a result, the net effect is additional job growth in 2018 and 2019 and growth in state economies and business output. However, health sector employment would fall immediately by 24,000 jobs in 2018. By 2021, the magnitude of coverage reductions become much larger than the initial tax cuts, causing state economies to shrink.

By 2026, 924,000 fewer people would have jobs and gross state products would shrink by $93 billion. Most of the jobs lost would be in health care, reaching 725,000 jobs lost by 2026.

AHCA would dramatically increase the number of uninsured and reduce access to health care, particularly for low and moderate income Americans. This analysis demonstrates that the consequences of this new bill would be much broader and extend well beyond the health care system. Despite initial gains in employment and economic growth, the ultimate decreases in federal spending would cause major reductions in employment and state economic activity.

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