South Carolina will lose 29,000 jobs in 2019 if Congress repeals the Affordable Care Act without a replacement plan, a national study by a group writing affordable health care policy has found.
But will it?
The study, released this week by The Commonwealth Fund, has a fatal flaw—it assumes tax payer-funded government policy creates stable jobs. It ignores the fundamentals of economics—supply and demand, which don’t hinge on government funding.
The study explores two areas under scrutiny by the Republican-controlled Congress—federal tax credits that subsidize health plans on the federal exchange, and Medicaid expansion.
South Carolina has not expanded Medicaid to 138 percent of the poverty level, the new threshold under the health care law.
To help me make my point, I turn to the late French economist, Frédéric Bastiat. “Let us accustom ourselves, then, to avoid judging of things by what is seen only, but to judge them by that which is not seen,” he wrote in his book, “That Which is Seen and That Which is not Seen.”
And that which is seen is the 11.3 million jobs created during President Obama’s tenure, according to a January report by CNN.
But we can’t see how jobs—namely health care sector jobs—would have recovered anyway following the Great Recession in the absence of government programs.
The study shows how federal funding flows directly to the health care industry. What is unseen is how taxpayer dollars would be spent—and how many and what sort of jobs would have been created—if they weren’t funneled through the government. Consumers fund industry naturally when they have the money to spend.
We see health care subsidized on the backs of the wealthy in order to extend affordable care to the poorest among us in need of health care. Families making at least $250,000 annually are now taxed at a higher rate to help fund the tax credits.
We see that approximately 20 million people became insured under the ACA from 2010 to early 2016.
We can’t see how that wealth would be invested into the economy absent government intervention.
I’m not holding my breath over whether the ACA gets repealed, though. Republican leaders may keep the mandate for insurers to cover pre-existing conditions—try funding that without subsidies.