The Senate is now considering its latest Affordable Care Act (ACA) repeal-and-replace bill, known as Graham-Cassidy, which it hopes to pass by the end of this week. Many elements of the bill resemble earlier proposals: repealing several ACA taxes, terminating the individual and employer responsibility mandates, and converting Medicaid funding to a per capita allotment. What’s new is the provision to end the Medicaid expansion and federal subsidies for health insurance exchanges in 2020 and replace them with a short-term block grant to states that cuts about $200 billion from current spending levels between 2020 and 2026. The block-grant funds expire in 2026, however, so funding might plummet $200 billion more in 2027 if the grant funds are not extended.
We concluded that Graham-Cassidy, if enacted, would lead to an initial uptick in national employment, followed by marked job loss and weakened state economies. Key findings were:
- Total national employment rises by 225,000 in 2018 but then falls, with 345,000 jobs lost by 2026. Job losses could be far deeper in 2027 if the short-term block grant is not extended or is scaled back; S&P Global Ratings has forecasted 587,000 jobs lost by 2027.
- Health care employment drops immediately, declining by 47,000 jobs in 2018, with 267,000 jobs lost by 2026.
- States’ overall economies, as measured by gross state products, erode by $39 billion (in current dollars) in 2026.