Report: GOP health care plan could cost Iowa 9,200 jobs

In addition to leaving more than 23 million Americans without health insurance by 2026, the Republican-backed American Health Care Act — in its current form — also could have serious economic consequences, eliminating nearly one million jobs by 2026, including 9,200 in Iowa.

That's according to a new report out Wednesday by George Washington University and the Commonwealth Fund.

Researchers looked at more than 20 provisions of the law, including changes to Medicaid, premium tax credits and health funds for states, to see how they would affect employment and state economics.

The plan to repeal and replace the Affordable Care Act — which is now being reworked by the U.S. Senate — gets rid of income-related tax credits in favor of age-based tax credits as well as eliminates federal funding for the Medicaid expansion starting in 2020 and places a per capita cap on the insurance program for low-income and disabled Americans.

'There's lots of attention right not on those who would lose health insurance,' said Leighton Ku, director of the Center for Health Policy Research at George Washington University and lead author of the report. 'But what we're trying to do in this study is take a step back and look at employment and state economies.'

Their findings?

Nationwide, gross state products — an economic measure similar to the gross domestic product —— could fall by $93 billion by 2026, while business output in states could fall by $148 billion. In Iowa, gross state product could drop $900 million while business output could be reduced by $1.3 billion.

What's more, states that expanded Medicaid, such as Iowa, are likely to experience more severe job losses and deeper economic declines, though nonexpansion states would see substantial losses as well.

Health care jobs

The health care sector would take the biggest hit, nationally and in Iowa — accounting for more than three-quarters of the job losses nationwide and about two-thirds of Iowa's job losses.

Health care has been one the economy's bright spots, Ku said, growing quickly over the past several years and providing quality jobs. But those job losses can reach outside the sector as well, affecting retail, construction and real estate, among other sectors.

Insurance companies as well as Medicare and Medicaid reimburse health care facilities for care provided. Those hospitals, pharmacists and other providers then use that revenue to pay employees, rent space and buy equipment.

If dollars for Medicaid patients begin to dry up, hospitals may be less likely to hire additional workers to build an expansion, for example, Ku said. That can trickle out further to additional sectors if health care workers aren't as likely to buy other goods and services.

In addition, the report found that while some states might see an initial uptick in employment due to proposed tax cuts, employment in the health sector would fall immediately in 2018 in 17 states and across most of the Midwest including Iowa, Illinois, Indiana, Missouri, Ohio and Wisconsin.

In Iowa, it is anticipated that the health care sector would lose 300 jobs in 2018.

'Business will be tighter,' Ku said. 'You can be working in grocery store or something else completely. There is a drag that occurs for you too. ...

Some people are concerned about health care but there are plenty of people concerned with jobs. The president and congressional leaders want to create jobs and bolster economy but this particular policy action doesn't look like it will do that.'

l Comments: (319) 398-8331; chelsea.keenan@thegazette.com