New Study Projects Obamacare Will Kill Up to 700,000 Jobs

If you haven't yet called your congressman about voting against Obamacare, maybe this will give you some more ammo. One of the reasons the most powerful woman in the world, Nancy Pelosi, has given for the passage of Obmacare is that it would create up to 400,000 jobs. She bases the claim on a report created by the George Soros funded,  Center for American Progress which claims the bill will create between 250,000 to 400,000 jobs per year over 10 years. Like much of the Data coming out of the Progressive CAP it is laden with unsupportable claims about savings in health care costs. The study is bogus, Obamacare will kill jobs not create them.

If one uses the same methodology as CAP and take out the unsupportable claims about savings, we find that the bill will kill between 120,000 and 700,000 jobs by 2010. According to the Study compiled by Americans for Tax Reform and the Beacon Hill Institute, the CAP research uses numbers that are more Obamacare favorable than the administration.

CAP’s claim about job creation rests on its assumption that various developments ensuing from passage of the bill – upgrades in medical technology, the promotion of preventive care and the reduction in administrative costs – would save $683 billion over ten‐years and thus set in motion new incentives for firms to create jobs. The trouble is that the claimed costs savings are at odds with estimates from both Congress and the Executive Branch, which, together, are responsible for considering and ultimately implementing the legislation.

Beyond that, as explained many times, even the White House figures conflict with reality.

There is no evidence that the projected savings proposed by the Obama administration, particularly in areas such as preventive care, would ever materialize. The literature cited by proponents is speculative at best. Also, there is no guarantee that the administration would be successful in lowering insurance premiums while expanding coverage, without limiting access to health care.

Data provided by the Congressional Budget Office (CBO) and the Centers for Medicare and Medicaid Services (CMS) show that rosy estimates about cost savings are, to say the least, of dubious validity. The Chief Actuary of CMS states that “all such estimates are uncertain and that actual future impacts could differ significantly from the estimates of any given organization.”Prominent health care experts such as Dr. Delos Cosgrove of the Cleveland Clinic and Dr. Jeffrey Flier, Dean of the Harvard Medical School, echo this sentiment.

In particular, the CMS report points out that Congress is not likely to allow the roughly $500 billion in Medicare cuts, which are essential to the CAP argument, to take place. The unlikelihood that these savings would ever see the light of day is predictable in the light of the “doctor fix,” under which Congress or the President have suspended scheduled cuts (now at 21% for 2010) in the physician’s Medicare reimbursement rate under the Sustainable Growth Rate (SGR) program every year since 2002.

Once we dismiss purported cost savings such as the proposed Medicare cuts, the job gains produced by the CAP methodology become job losses. We utilized the same of PPACA, but with the unsupportable costs savings stripped from the model. 

•  The first estimate applies the CAP methodology to the CMS estimate that the PPACA would increase national health expenditures by $24.8 billion over the baseline case by 2019. This estimate shows that PPACA would kill 120,000 jobs by 2019.

• The second estimate applies the CAP methodology to a scenario in which we begin with the CMS estimate but in addition eliminate the $437 billion in Medicare cuts assumed by CAP and then factor in an additional $70 billion in discretionary spending that the CBO indicated would take place under the Bill. The addition of these figures would increase national health expenditures by $148.8 billion in 2019 and thus kill 700,000 jobs by 2019. It turns out that the CAP methodology, when revised to incorporate realistic assumptions about the cost effects of PPACA, shows the bill to be a job killer rather than a job creator(The full study is embedded below).

Sector	ESI	Jobs
	%	Low	High
Agriculture, mining and construction
Agriculture, forestry, fishing and hunting	20	-923	-5,441
Mining	68	-939	-5,478
Construction	37	-7,374	-43,316
Manufacturing	65	-18,022	-105,229
Trade
Wholesale trade	57	-8,149	-47,663
Retail trade	39	-14,364	-84,339
Transportation and communication
Transportation and warehousing	55	-6,290	-36,806
Utilities	80	-906	-5,271
Services
Information	63	-4,510	-26,342
Financial Activities	66	-13,236	-77,269
Professional and business services	44	-22,606	-132,596
Educational services	61	-5,493	-32,102
Leisure and hospitality	25	-8,436	-49,682
Other services	48	-7,946	-46,564
Totals		-119,194	-698,098

BHI Health Care Reform as Job Killer(5)