A study says Massachusetts has lost 18,000 jobs because residents were required to obtain health insurance under an act signed into law by Mitt Romney.
Rick Perry on Saturday, December 10th, 2011 in a Republican presidential debate
Rick Perry says a study found that Massachusetts lost 18,000 jobs because of a mandate in its health care law
Texas Gov. Rick Perry continues to hit fellow GOP presidential candidate Mitt Romney, the former Massachusetts governor, over similarities between the state health care plan Romney signed in 2006 and the federal act that President Barack Obama signed into law in 2010.
At the Dec. 10, 2011, debate in Iowa, Perry said he was stunned by Romney’s earlier comment that he would have told President Barack Obama he was headed in the wrong direction on health care, because "that is exactly the path that you've taken Massachusetts." Perry continued: "The Beacon Hill study itself said that there’s been 18,000 jobs lost because of that individual mandate." Perry was referring to the requirement in the Massachusetts law, also found in the national one, that individuals buy health insurance or pay a fine.
We wondered whether Perry was right about the study and the Massachusetts mandate's impact on jobs in the state. Fortunately, PolitiFact previously looked into a similar Perry claim, made in an Oct. 10 video posted online by the Texan's campaign: "Romneycare killed 18,000 jobs."
"Romneycare" is a label that critics have applied to the Massachusetts health care law, which is similar in its broad outline to the national health care law.
In addition to including an individual mandate, the Massachusetts and federal laws both leave in place the existing insurance systems: employer-provided insurance, Medicare for seniors and Medicaid for the poor. Both also seek to reduce the number of uninsured residents by expanding Medicaid and offering subsidies to help moderate-income people buy insurance. Companies that don't offer insurance have to pay fines, with exceptions for small business and a few other cases. The state and national laws also each provide for voluntary "exchanges" that individuals and small businesses can use to purchase private-sector health insurance. The exchanges are designed to offer a range of plans with different benefits and premium levels.
Both the statement in the Perry video and the statement Perry made in the Dec. 10 debate were based on a September 2011 study by the Beacon Hill Institute, a Boston-based economics research group that is affiliated with Suffolk University and supports "limited government, fiscal responsibility and free markets."
Both statements suggest that 18,000 actual jobs were eliminated because of the Massachusetts law. In fact, however, the Beacon Hill study makes the more modest assertion that the law prevented 18,000 jobs from being created.
The study is based on the idea that the Massachusetts law drove up health care costs for state government (through increased Medicaid spending) and for individuals and businesses (through higher health insurance premiums), which in turn dampened job growth. Using a computer program that models how policies could affect the state’s economy, the Beacon Hill researchers estimated that the state’s economy created 18,313 fewer jobs in 2010 than it would have without the health care law.
To put the so-called uncreated jobs in perspective, the Massachusetts workforce was about 3.5 million people in July 2010, according to the federal Bureau of Labor Statistics. The unemployed numbered about 293,000.
We should note here that reports like this one largely depend on the underlying economic assumptions behind the economic model that is used. Right-leaning and left-leaning groups often come up with different numbers when looking at the same policies. In this case, we were unable to find any other studies that looked at the effects of the Massachusetts health care law on employment.
Our friends at Factcheck.org checked out the 18,000 number in September after Perry started making the claim on the campaign trail. They concluded that the figure was an estimate that could neither be proved nor disproved after gleaning mixed opinions in Massachusetts on whether the law hurt actual job growth.
Separately, we recalled an analysis by the nonpartisan Congressional Budget Office of how many jobs might be lost or gained nationwide because of the 2010 federal health care law. The analysis found that the law would reduce the amount of labor used in the economy by about 800,000 jobs, partly because businesses facing higher costs would decide not to add workers but mostly because people working jobs simply to retain their existing health insurance would be able to leave those jobs and buy insurance on their own.
In the Dec. 10 debate, Perry cited a study that found increased costs led businesses to create fewer jobs. That is certainly plausible, although we found no other research supporting that figure.
More significantly, Perry's statement makes it sound as if the study says existing jobs in Massachusetts were vanquished. Instead, it asserts that 18,000 jobs were not created in the first place.
Also, Perry’s claim blames one part of the health care law — the individual mandate — for the effect on employment, while the study considers the impact of the entire law. That is, it doesn't specify which parts most influenced the state’s economy.
A single study gives Perry's statement an element of truth. But his claim leaves the misimpression that 18,000 existing jobs went away because of the Massachusetts law and incorrectly says a single part of the law was to blame. His statement rates Mostly False.
Published: Monday, December 19th, 2011 at 11:37 a.m.
Subjects: Health Care
ABC News, transcript, Republican presidential debate, Dec. 10, 2011
PolitiFact National, "Rick Perry ad says ‘Romneycare’ cost 18,000 jobs," Oct. 14, 2011
Email interview with David Tuerck, executive director, the Beacon Hill Institute, Dec. 16, 2011
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