Urban Institute: Health reform won't lead to job losses

Amid continued assertions by right-leaning politicians that full implementation of the Affordable Care Act will lead to significant job losses and stymie economic growth, the Urban Institute has released a study using Massachusetts as a model that predicts there will be little net effect to jobs and the overall economy if health reform is fully implemented.

"There is no evidence that Massachusetts health reform slowed economic growth in the state," the report concluded. "In fact, despite slower growth in (gross domestic product) relative to the rest of the country prior to health reform, GDP grew faster in Massachusetts relative to the rest of the nation after the implementation of health reform."

According to Lisa Dubay, senior fellow with the Health Policy Center of the Urban Institute and lead author of the study "Will the Affordable Care Act Be a Job Killer?", the experience in Massachusetts after health reform there actually shows the economy growing faster than in other parts of the country.

"While GDP growth in Massachusetts lagged the rest of the country before health reform there, it has outpaced GDP growth in the rest of the country, which has remained flat, since health reform was initiated there."

The report further notes that this growth hasn't been simply the result of Massachusetts adding more healthcare-related jobs as a result of the insurance mandate.

"Growth in other non-health and social assistance industries, which was much slower in Massachusetts relative to the rest of the nation prior to health reform, increased by 3.1 percent between 2006 and 2010," the report noted. "Over the same time period, non-health and social assistance industries GDP decreased by half a percent in the rest of the nation."

Many arguments on job losses or economic stagnation have focused on the potential penalties employers may need to pay under health reform and that a number of employees may choose to simply drop coverage. Again, when studying the effects in Massachusetts, the experience there suggests this may not be the case, as the rate of employer-sponsored insurance grew from 70 percent to 75 percent in the years immediately following the insurance mandate there.

There may also be a misunderstanding of the law at play as well, noted Dubay. "There seems to be a lot of push back from smaller employers," she said. "But under the law, many of the rules that they cite as harmful don't actually apply to those that employ fewer than 50 people."

While studying Massachusetts as a model may have had some potential shortfalls, considering the diversity of the national economy, Dubay noted that the findings of the research team were also echoed by a 2010 study by the Congressional Budget Office which found job losses as a result of health reform would amount to roughly 0.5 percent of the workforce.

"And many of those losses would likely come from people who are choosing to remain employed as a means of obtaining health insurance," she said.