Dive Brief:

• The Senate’s Better Care Reconciliation Act (BCRA) would result in 1.45 million fewer jobs by 2026, according to a new report by The Commonwealth Fund. Healthcare would take a hard hit with 919,000 fewer jobs.
• The Commonwealth Fund predicted an additional 753,000 jobs in 2018, but employment numbers would drop sharply after that. It said every state except Hawaii would have fewer jobs and a weaker economy. States that expanded Medicaid would feel the most pain.
• The report came out on the same day that the Bureau of Labor Statisticssaid 37,000 healthcare jobs were added in June, up from 20,600 added in May .

Dive Insight:

The Commonwealth Fund said that job losses and lower economic growth would begin in 2020 and deepen in the following years as more people lose health insurance coverage, if the Senate bill were to become law.

The House’s American Health Care Act (AHCA) would cut a similar number of insured Americans, but the BCRA would harm the economy more, according to the report. The Commonwealth Fund estimates the AHCA would result in nearly 1 million lost jobs.

New York, California and Pennsylvania would lose more than 100,000 jobs each. “Twenty-two million Americans will become uninsured under the Better Care Reconciliation Act, and now this research makes it clear that people will also be at risk of losing their jobs and that states’ economies will suffer,” said Sara Collins, vice president for healthcare coverage and access at The Commonwealth Fund.

One reason for the economic problems resulting from the BCRA is the bill’s Medicaid cuts, which would deepen further after 2026. Also, the BCRA’s tax provisions would result in much lower assistance, especially for older Americans, which will result in people not being able to afford high deductibles and result in fewer people enrolling in health plans. Third, the BCRA would reduce the threshold of the medical care deduction from 10% to 7.5%.

Cuts to healthcare jobs would especially harm the economy. Healthcare has been a major driver of job growth in recent years. The Commonwealth Fund predicts healthcare would lose 30,000 jobs in 2018 under the BCRA. Ultimately, 919,000 healthcare jobs would disappear, which is about 1 of every 22 health jobs.

“While our analysis shows other employment sectors grow initially, by 2026 more than half a million jobs are lost in other sectors of the economy, too,” according to The Commonwealth Fund.

Meanwhile, the Bureau of Labor Statistics released the June jobs report Friday, which said there were 37,000 healthcare jobs added in June, with 26,000 in ambulatory care services and 11,700 at hospitals. So far this year, healthcare job growth has slowed. Healthcare has added 24,000 more jobs on average per month so far in 2017 after adding 32,000 on average per month in 2016.

Healthcare has seen some high-profile layoffs in 2017. For instance, NYC Health + Hospitals cut 476 management positions to save $60 million in the next fiscal year after losing $776 million for the first half of 2017 and Brigham and Women’s Hospital offered voluntary buyouts in April to 1,600 workers.

Also, Memorial Hermann, Summa Health and Hallmark Health all recently announced staffing cuts, which they blamed on declining reimbursements, lower admissions and shrinking operating incomes.

The 37,000 new healthcare jobs in June is positive, but the question is whether that trend remain or will growth slip back down to this year’s average.

The Commonwealth Fund’s report will surely get the attention of economics — and senators. Senate leaders are already trying to figure out ways to tweak the BCRA to get enough conservative and moderate support to pass the legislation. Republicans only have a two-vote majority in the Senate and the current bill doesn’t have enough support for passage.

Uncertainty about what bill — if any — will pass is likely a major factor is slowed healthcare job growth. This latest report about jobs losses if the BCRA becomes law will only deepen the opposition against the bill.