The health care debate, for obvious reasons, has focused primarily on health care — that is, how many people stand to lose coverage under the various Republican proposals and how those plans will affect the cost and accessibility of care.
But the fate of the GOP push to repeal and replace Obamacare also carries sweeping economic consequences, some less obvious than others.
Take the opioid crisis. The epidemic has wrought such havoc that it’s held the economy back from reaching full employment. That’s one conclusion a new Goldman Sachs analysis reaches on the toll of the wave of addiction.
While a growing economy continues to churn out new jobs, the number of people actively looking for work has plateaued in recent years — a development the report chalks up in part to the ranks of those sidelined by drug abuse. “The opioid epidemic is intertwined with the story of declining prime-age participation, especially for men, and this reinforces our doubts about a rebound in the participation rate,” Goldman economist David Mericle writes.
The Federal Reserve in a May report suggested addiction is taking a toll on hiring, with a survey of employers revealing that some have struggled to find applicants for low-skilled positions who could pass a drug test. (There’s been some good news, too: The Centers for Disease Control and Prevention reports that prescriptions dropped from 2012 to 2015, The Washington Post’s Lenny Bernstein writes. That could trigger fewer first-time addictions.)
The Goldman Sachs report doesn’t delve into proposed solutions. But Republican senators trying to forge a health care package they can rally behind are actively wrestling with the issue. Senate GOP leadership, hoping to stave off defections from senators in states hardest hit by opioid abuse, have added $45 billion for treatment to their original proposal. Addiction specialists say that is woefully inadequate to make up for the bill’s deep cuts to Medicaid, which otherwise offers open-ended coverage for all those who qualify.
Not surprisingly, the broader jobs impact of an Obamacare overhaul is tough to pin down. Sen. John Cornyn, Texas, the second-ranking Republican in the upper chamber, on Thursday tweeted a Wall Street Journal editorial arguing that the current law will destroy 250,000 jobs. It pointed to a survey of small businesses that found them keeping payrolls low to avoid a penalty for bigger enterprises that fail to provide adequate coverage for full-time workers.
One obvious problem with the piece: It substitutes a look at the effect of one slice of the law for a cost-benefit analysis of the whole.
Others have attempted a more comprehensive look. A study earlier this year by George Washington University researchers, for example, found that repealing Obamacare’s health insurance subsidies and rolling back its Medicaid expansion would cost 3 million jobs nationwide over the next four years. Of that total, the study estimated that 912,000 jobs would be lost directly from the health care industry. A Goldman Sachs study this spring reached a similar conclusion, noting that the sector has added roughly 500,000 jobs since the law took effect, the result of millions of people gaining access to insurance coverage.
Zooming back in on the opioid crisis, the firm hesitates to draw conclusions about what the epidemic means for the slack left in the labor market. The relationship between the two, it says, “is complex.” But the crisis brings plenty of other public costs along with it. A 2013 study priced them at $78.5 billion, and “the crisis has grown significantly since then,” Goldman’s Mericle writes. That is, the economic wages of a sick population ripple far beyond the employment rolls.