ACA a job-killer? Not true, Stanford researchers say

Employment in some states was up and in others it was down, but the net effect of the ACA on jobs was still zero, Stanford researchers say.

One of the many mantras from the right side of the aisle about the Affordable Care Act was that it was a job killer, eventually forcing many businesses to cut positions rather than be subject to its regulations.

Not true, according to a new study (PDF) by the National Bureau of Economic Research, conducted by researchers at Stanford University.

“Our findings indicate that the average labor supply effects of the ACA were close to zero,” the study’s authors wrote. But there are some caveats. Among the biggest is the fact that the ACA may have impacted those seeking coverage on the state health insurance exchanges—by encouraging them to find work. 

Because the ACA assumed low-income people would get coverage through Medicaid, it doesn’t provide financial assistance to people below poverty for other coverage options. As a result, in states that haven’t expanded Medicaid, many adults fall into a “coverage gap.” They make too much money to qualify for Medicaid, but not enough to get marketplace premium tax credits.

In those nonexpansion states, the study says, more people may have sought work in order to make enough money to qualify for the subsidies.

By contrast, in states where the gap doesn’t exist, employment may have fallen. The net effect of both apparently canceled one another out, according to the study. The study suggests that this may have smoothed out a 2014 Congressional Budget Office report that concluded that as many as 2 million people would exit the labor force by 2024 due to Medicaid expansion, where some individuals would decide to forego employment in order to maintain their coverage.

Mark Duggan, a Stanford economist and co-author of the study, told the Wall Street Journal that the ACA “doesn’t look like it hurts the economy.” The study did note a significant financial impact in lowering the number of uninsured Americans.

Since the ACA was signed into law seven years ago, there’s been a healthcare hiring boom, with both physicians and nurse practitioners in particularly high demand.

The report was released as Senate Republicans reckon with a nearly decade-long attempt to repeal and replace the ACA, although their efforts so far have fallen short. The House of Representatives passed a comprehensive repeal and replacement bill last month.

A study issued last month by George Washington University and The Commonwealth Fund concluded that the House bill to do away with the ACA could kill as many as 1 million jobs by 2026. The Senate version could do even worse: According to a separate GWU analysis, it could eliminate as many as 1.45 million jobs.