Business group says health care reform would create jobs in California

A new report released on Sunday from the Bay Area Council Economic Institute (BACEI) shows that federal health care reform will add tens of thousands of jobs to the California economy, contradicting a number of reports that the law will hurt economic growth. The report comes as the state announced the latest budget gap, continuing a negative budget trend for the state. BACEI is a public-private institution that typically advocates for business interests.

In the report, the organization considered each provision of the Affordable Care Act (ACA) and examined potential economic impact. “On net, this analysis suggests that upon full implementation in California, the Affordable Care Act will have a positive impact on California’s economy with variation across regions based largely on their socioeconomic makeup. Full implementation of the Affordable Care Act as compared to the non-reform scenario in 2010 would have resulted in 98,861 new jobs in California (a 0.6% increase in total employment) and $4.4 billion in additional gross state output,” report authors write.

Report data shows that Southern California alone would see a 0.7% increase in the number of people with jobs – working out to just under 60,000 people added to the labor force. Adding $3 billion to the local economy.

Report authors note that the law and the funding it provides would essentially be a force mulitplier adding positively to the health care sector and helping to mitigate some of the potentially negative economic effects health care would have as a sector if it remains unchanged.

Several states brought a challenge to the Supreme Court over the individual mandate provision in the ACA. BACEI notes in the report that this provision is likely to be a key job creator and will also improve the productivity of people already with jobs if they now have access to health care.

“The presence of the individual mandate will also be one factor that changes the set of incentives that exists for individuals in ways that will influence their behavior. The individual mandate may, for example, increase the value that people place on employer-sponsored insurance. And in an environment with a greater proportion of the population being insured, in part due to the individual mandate, there will also be greater labor force participation. Also, to the extent that people are employed, the implication is that there will be less time away from work or out of the labor force for reasons related to health,” the report says.

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