Depending on who you ask, the Patient Protection and Affordable Care Act (ACA) is either a panacea to the country’s rising cost of health care, or a government-sponsored spending spree that will lead the nation down the path to financial ruin.
Luckily, for those of us seeking a bit of good news, the folks at the Bay Area Council Economic Institute lean toward the former.
According to a report released by the institute last month, had the ACA reached full implementation back in 2010, it would have resulted in nearly 99,000 new jobs in the Golden State and added billions of dollars to the California economy.
This major boost in employment would primarily be concentrated in the southern portions of the state, with San Diego County picking up roughly 6,500 new jobs, and those counties south of San Bernardino adding another 57,000.
Of these added jobs, 87,821 (89 percent) of them would have been funded by the spending increases that come with the Medicaid expansion, the individual mandate and subsidies for the purchase of private insurance through the state’s exchange, such as the positions created in the health care sector to meet the increased demand for care from the newly insured.
In addition to the uptick in California’s ailing employment figures, this increased spending that comes with a fully implemented ACA would boost the state’s economic output to the tune of $4.4 billion, the report contends.
As was seen with the projected job growth, southern California takes the majority of this increased output, accounting for roughly $3 billion of the overall figure.
When justifying these projections, the institute notes that the added health care spending called for under the ACA would ultimately have an impact on nearly every sector of the economy.
"Additional expenditures in the health care sector will result in additional purchase of equipment, thus leading to more production and hence employment in manufacturing, and to the hiring of additional employees, who will then spend money on food, clothing, and shelter among other things," the report states.
While limiting its scope to California, the report noted that its methodology was based on a similar study that examined the ACA’s impact in Colorado. That study projected similar economic benefits, the report states, adding that it would be fair to assume that financial effects would apply to other states as well.
The full report can be viewed on the institute’s website, www.bayareaeconomy.org.
Assuming that the institute’s projections are valid, and more than $4 billion of economic activity hangs in the balance, the pending Supreme Court decision on the constitutionality of the ACA takes on a whole new set of undertones, especially in cash-starved states such as California.