There is a substantial human story stemming from Donald Trump’s impending repeal of Obamacare. As the estimated 20 million Americans lose their health benefits we’ll see stories about families, elderly Americans, and young entrepreneurs who will have to make difficult decisions about their futures and who are likely to experience significant trauma without a safety net.
However, the Republicans’ planned repeal of the Affordable Care Act also will have a negative impact on the US economy – an economy that is starting to show signs of weakness after 8 years of steady growth and improvement. The ethical issues of repealing Obamacare – especially without a plan to replace it – are significant, but this post explores the economic impact of the decision.
- Emergency Rooms – One of the main challenges of the US healthcare system is that millions of Americans who cannot afford care simply use emergency rooms as their health care providers. Since hospitals cannot deny treatment to patients who present acute symptoms at an emergency room, hospitals are required to provide care and, in if the patient can’t pay, the cost is simply transferred to those who have insurance or who pay out of pocket. The medical costs of the uninsured will be shared with those who have insurance or the means to pay for medical services – either through a government program or through for-profit insurance companies that prioritize shareholders and CEO salaries.
- Jobs – A recent study suggests that the repeal of the Affordable Care Act will cost the US economy three million jobs including an estimated 181,000 jobs in Florida and 125,000 in Pennsylvania. While many of the jobs will be in the health care sector, still others are in the finance, construction, and retail industries.
- Entrepreneurs – Topping the significant challenges that face Americans who want to pursue a dream or business idea is the challenge of providing health care for themselves and their families as they start a new business. Small businesses typically account for significant growth in the US economy but with more American entrepreneurs unable to secure affordable health care for their families, the decision to repeal the ACA could further hurt job creation and innovation in the US economy.
- Tax Breaks for the Wealthy – A recent study using IRS data shows that the repeal of the ACA could result in a 2.8 billion dollar annual tax cut for the wealthiest Americans. Donald Trump’s trickle down argument that the savings to these families will result in more jobs and prosperity for other Americans is not supported by history. During the eight years of tax cuts for the wealthiest Americans under George W. Bush, the US economy lost almost half a million jobs. During the eight years of Back Obama’s presidency the economy gained over 11 million jobs.