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Obamacare contributes $218.8 million to local economy

Obamacare contributes about $218.8 million a year to the Jackson County economy — helping to fuel the Medford area's growing $1 billion health care sector.

Financial data requested from state agencies by the Mail Tribune reveals the high stakes as Congress fights over proposals to repeal and replace the Affordable Care Act, also known as Obamacare. House Republican leaders pulled their replacement plan Friday after it became clear they didn't have enough votes to pass the legislation.

Obamacare spending pumps up the economy and expands access to medical care, but also contributes to the federal deficit and a shortfall in the Oregon budget. 

Not all of the costs and access to care would have disappeared under the failed Republican plan, which would have reduced the federal deficit by $337 billion over a decade, according to the Congressional Budget Office.

But across America, 24 million people would have lost health insurance during those years, the CBO estimated.

Under Obamacare, federal and Oregon governments are spending $188.4 million on health care for the 25,173 Jackson County residents who gained Oregon Health Plan coverage because of expanded eligibility, according to the Oregon Health Authority.

Another $30.4 million in tax credits goes to help almost 6,000 Jackson County residents buy health insurance plans through HealthCare.gov, the Oregon Department of Consumer and Business Services estimates.

On average, the tax credits equal $428 per month, the department says.

“The Affordable Care Act gave people vast access to health care they previously didn’t have,” says Teri Smith, director of Rogue Community College’s Allied Health Occupations Department.

The department is racing to educate students who want jobs in the growing health care sector. RCC gets input from its medical industry partners about what knowledge and skills the students need, she says.

“The majority are hired long before they complete programs because there is such a need,” Smith says.

Repealing Obamacare would cost 42,000 jobs in health care and other industries in Oregon, the Economic Policy Institute estimates.

As of January, the Medford metropolitan area had 14,400 workers in the health care and social assistance sectors, which are tabulated together because of their intertwining natures, according to the Oregon Employment Department.

Those sectors gained 470 jobs since January 2016. Only the retail sector added more jobs, with 880 new positions, employment data shows.

One in six local jobs is now in the health and social assistance industries.

Average pay for health care and social assistance jobs is approximately $53,500 annually, compared to $41,500 for all sectors, Oregon Employment Department data shows.

The gross domestic product of those sectors rose from $807 million in 2010 — when Obamacare was enacted — to almost $1.03 billion in 2015 for the Medford area, according to the most recent GDP data.

Not all of the growth in the local health care industry can be attributed to Obamacare, says Guy Tauer, regional economist for the Oregon Employment Department.

“Health care has been a growing sector of our economy. It’s been steadily growing for the past 20 years,” he says. “It’s hard to parse out how much is related to the Affordable Care Act and how much is the growing population and the aging population. Historically, the Rogue Valley is an area that has served as a hub for medical services for more than just the population that lives here. Certainly having more people with health insurance helps growth in that sector.”

Oregon is using coordinated care organizations to manage the physical, mental and dental health care of OHP patients. Two CCOs serve Jackson County.

“The fact that we have locally based, locally controlled CCOs investing in the community has been unbelievably good for increasing the overall health of the community," says Josh Balloch, vice president of government affairs and health policy for the CCO AllCare Health.

"Making sure people get access to mental, addiction, physical, preventative and dental care has improved the health of the community and benefited the state — and it’s an economic driver,” he says.

Not all of the $218.8 million in new health care spending for Jackson County residents is spent locally. Some residents travel to other areas, especially for complex care such as organ transplants, Balloch notes.

However, health care dollars also flow into Jackson County when Obamacare enrollees in surrounding counties get care in the Rogue Valley.

Balloch says taking away Affordable Care Act funding would have consequences.

“There would be massive downstream implications. Those are just simple facts,” he says. “It would have an impact on the health of the community and on the economic health of the community.”

The $218.8 million in Obamacare spending for Jackson County residents dwarfs funding the county government used to receive from the federal government to offset losses in shared timber harvest revenue.

Those federal payments to Jackson County peaked at $21.8 million in the 1989-1990 fiscal year but have dwindled to just under $3 million for the county's general fund this fiscal year. The road fund is hoping to get $250,000, according to Jackson County Administrator Danny Jordan.

While Jackson County has struggled back to its feet, neighboring Josephine County — where voters have refused most property tax funding measures — has slashed law enforcement and turned its library system over to a nonprofit group run mainly by volunteers.

U.S. Rep. Greg Walden, R-Hood River, is among the congressional leaders spearheading efforts to repeal and replace Obamacare.

Walden said the experiment has been a disaster and has done nothing to lower the skyrocketing cost of health care in America.

Even with subsidies, many people can't afford to enroll in Obamacare. Businesses that provide health insurance are under a heavy burden, and people who buy insurance on their own face crushing costs, Walden says.

In testimony on the floor of the House of Representatives Friday, Walden told the story of a constituent who lost her health insurance and found a comparable replacement plan. But the plan was $564 more per month, pushing her monthly payments to $1,503 — or $18,036 per year.

He said repealing and replacing Obamacare would drive down costs and increase people's flexibility to choose plans that fit their families' needs.

Walden said Obamacare spending is putting Medicaid, the federal health insurance program for the poor, on an unsustainable path.

He said repealing and replacing Obamacare would be only the first step in a larger effort to control skyrocketing costs for prescription drugs, hospital stays and other elements of medical care.

"We're going to go after the cost drivers," Walden said.

Family health insurance in America now costs more than buying a house.

The average monthly cost of home ownership — including mortgage payments, home insurance and utilities — is $1,494 per month, or $17,929 per year, according to the Census Bureau.

Average premiums for family health insurance are $1,512 per month, or $18,142 annually, the National Conference of State Legislatures says.

Those premiums do not include co-pays, deductibles and other out-of-pocket costs paid by Americans.

Reach staff reporter Vickie Aldous at 541-776-4486 or valdous@mailtribune.com. Follow her at www.twitter.com/VickieAldous.

Ami Kesterson draws blood from Tori Noon during their phlebotomy class Wednesday. Both are medical assistant students at Rogue Community College, which is racing to educate students who want jobs in the growing health care sector. [Mail Tribune / Jamie Lusch]