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Health Care Reform Didn't Kill Jobs In Massachusetts: Report

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Former Gov. Mitt Romney's Massachusetts health care reforms didn't cost the state jobs and President Barack Obama's national law isn't likely to either, according to a new study.
Former Gov. Mitt Romney's Massachusetts health care reforms didn't cost the state jobs and President Barack Obama's national law isn't likely to either, according to a new study.

You've heard it a million times before: President Barack Obama's health care reform law is a job killer that will drive up costs for American businesses, freeze hiring and force layoffs. But in Massachusetts, where then-governor and current presumptive Republican presidential nominee Mitt Romney enacted similar reforms, that was not the case.

The Massachusetts health care reform law shares many characteristics with the national health care reform law. Most individuals are required to obtain coverage, most employers are required to offer it and subsidies are available for low-income residents. Therefore, the state's experience with its reform programs might be a proxy for what could happen nationally under Obamacare.

Republican politicians and groups like the U.S. Chamber of Commerce and the National Federation of Independent Business have claimed that the law, especially a requirement that companies cover their workers or pay penalties, would lead to higher unemployment.

An analysis issued Thursday by the Urban Institute, a Washington, D.C.-based research organization, however, shows that hasn't been true for Massachusetts. Although joblessness is up everywhere because of the recession and sluggish recovery, employment trends in Massachusetts are comparable to the rest of the country, according to the study.

"Massachusetts has achieved its goal of near-universal health insurance coverage under its 2006 health reform initiative, with no indication of negative job consequences relative to other states as a result of health reform," said the study, which was funded by the nonpartisan Robert Wood Johnson Foundation in Princeton, New Jersey.

The charge that health care reform would be a "job killer" has been a common argument made by Republicans and the business lobby since Congress began debating the legislation more than three years ago.

"The health care law contains a number of provisions that will eliminate jobs, reduce hours and wages, and limit future job creation," stated a report issued by House Speaker John Boehner (R-Ohio) last year. In 2009, The National Federation of Independent Business predicted 1.6 million fewer jobs would result from the proposed legislation.

"We know Obamacare will kill jobs," the Chamber of Commerce asserted in political ads in February.

If Massachusetts is any guide, those doomsday predictions won't come true -- assuming the main parts of the national health care reform law are allowed to take effect in 2014. Romney has vowed to repeal the law if he wins the election and the Supreme Court could strike it down by the end of this month.

Private sector unemployment in Massachusetts has been higher than the national rate and in four comparison states -- Delaware, Minnesota, Nebraska and Wisconsin -- since the state's health care law took effect. Unemployment worsened, however, from 2006 to 2008 and improved from 2008 to 2010 at about the same rates, according to the Urban Institute analysis of federal government data. The findings were consistent regardless of company size, type of job or whether employees worked full-time or part-time.

"The evidence from Massachusetts would suggest that national health reform does not imply job loss and stymied economic growth," the report concluded.

The Congressional Budget Office projects the law will have complicated effects on the labor market that will shrink it by approximately half a percent -- 800,000 people -- mostly because people will choose to work less or not at all because they will have access to subsidized health care coverage. Some older people who only keep their jobs for the health insurance also would be able to retire, CBO director Douglas Elmendorf testified before Congress in 2010.

Expanded health care coverage could also lead to increased demand for health care services and a rise in employment in the health care sector. But that shouldn't be how health care reform should be judged, Harvard University professors Katherine Baicker and Amitabh Chandra said in an editorial published in the New England Journal of Medicine Wednesday.

"Employment in the health care sector should be neither a policy goal nor a metric of success," they wrote. "The key policy goals should be to achieve better health outcomes and increase overall economic productivity, so that we can all live healthier and wealthier lives."

Correction: An earlier version of this article misstated the location of the Urban Institute. It is in Washington, D.C.

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