The federal health reform law would create about 100,000 new jobs and add $4.4 billion to California’s economy, according to a new study.
The Bay Area Council Economic Institute report said the Patient Protection and Affordable Care Act would add 58,000 new jobs in Southern California, 13,500 in the Sacramento Valley, 7,600 in the Bay area and 6,500 jobs in San Diego County. The other 10,000 would be spread throughout the rest of the state, the report found.
“In the debate over the federal health care law, this study shows there has been more heat than light when it comes to understanding economic and jobs impacts,” said Jon Haveman, study co-author and chief economist for the Bay Area Council Economic Institute, the research arm of the Bay Area Council. “By focusing on expanding health insurance coverage, making our health care system more efficient and making our workforce healthier, we can realize important employment and economic gains.”
The law is under U.S. Supreme Court review, with a ruling on its constitutionality expected in late June or early July.
It is unclear whether the data can be extrapolated to other areas of the U.S.
The authors said driving the employment gains is an overall rise in economic activity stemming from increased spending on healthcare and medical services and the secondary benefits of that money flowing to other parts of the economy.
Those figures take into account the “dampening impact” that provisions such as the employer mandate is expected to have on hiring and economic activity.
The authors said the employer mandate, forcing large employers to provide health insurance or pay a fine, is a “crucial tool” for the overall expansion of health care coverage that “on net is a job creator in the state,” according to the group.
By expanding health care coverage, the study found, the Affordable Care Act will also expand the overall labor force by better maintaining the health of the workforce and preventing workers from being sidelined because of health problems. Broader coverage will also reduce “job lock,” in which uncertainty about changing health insurance discourages workers from seeking better jobs.
The study is careful to note that “the ultimate impact of health care reform, though–both in terms of its true economic implications and whether it achieves its substantive policy goals–depends heavily on implementation, which will require close partnership between the federal government, the states, and the private, charitable, and non-profit sectors.”
The Bay Area Council Economic Institute is a partnership of business with labor, government, higher education and community leaders that works to support the economic vitality and competitiveness of California and the Bay Area.