Republicans have recently begun to take steps to repeal key parts of the Affordable Care Act, apparently without a replacement plan. A new study found that getting rid of Obamacare without a replacement plan could lead to the loss of nearly 3 million jobs within four years.
Obamacare Repeal Could Cost Healthcare Jobs
The Affordable Care Act contains two key provisions, federal tax credits used to subsidize individual premiums and Medicaid expansion programs. The government funds from these two provisions ultimately go to insurers and healthcare providers, meaning they have more money to expand their medical staff. Hiring more nurses, doctors and other healthcare workers was necessary to help treat the wave of newly insured patients. Numbers from the Bureau of Labor Statistics show that the healthcare industry added an average of 35,000 jobs per month in 2016, making up nearly 20% of the new jobs added last year.
If Americans lose the two provisions above, the number of uninsured patients could double and lead to greater uncompensated care costs for healthcare providers. The Congressional Budget Office (CBO) predicts repealing the ACA could leave millions without insurance. With more unpaid bills and increasing consumer healthcare debt, healthcare job losses seem eminent.
Federal Funding Cuts Threaten the Industry
A new report from the Milken Institute School of Public Health at the George Washington University and the Commonwealth Fund suggests that if the Affordable Care Act is repealed without a replacement plan, hospitals and health care providers would see their costs surge by $1.1 trillion from 2019 to 2028.
Cuts in federal funding pose a risk to the healthcare industry. According to the report, 2.6 million jobs could be lost in 2019 alone, rising to almost 3 million by 2021. Although job loss would be wide-spread across other industries such as construction and real estate, it will also impact the healthcare sector. Healthcare job loss is expected to comprise one-third of the jobs lost by 2021. Cutting federal funding to hospitals and healthcare providers would cause a domino-like effect throughout the entire U.S. economy. Results would affect not only employment but also economic activity, and state and local revenues.
The report breaks down job loss by state. California is number 1 of the top 10 with 334,000 job losses and North Carolina is at the bottom with 76,000 job losses. To be fair, if changes to tax policy or other healthcare policy changes are made, the effects of an Obamacare repeal may not be as drastic.
American’s fears of the Obamacare repeal include losing coverage for a period of time, losing child coverage and cancel premium tax credits. President Elect Trump has gone on record stating that he plans to keep the coverage of children on their parents plans and that people will not lose coverage for a period of time while Obamacare is transitioning. Trump has stated that he plans to keep pre-existing conditions as covered, which is an important aspect for many. Since no replacement plan has been released, no one really knows what is in store for the future of healthcare in America.
What Effect Might the Repeal of Obamacare Have on Your Healthcare Business?
Healthcare service providers such as staffing agencies, suppliers, medical billing services, etc. may experience some changes in the coming months and years. Extra working capital can reduce the stressors of change for small business owners, such as having enough capital to cover payroll and weather periods of growth or seasonal slowdowns. Give us a call today to learn more about our accounts receivable factoring services for the healthcare industry.