OREANDA-NEWS. The states that expanded health insurance access under the Affordable Care Act (ACA) have seen substantially faster growth in healthcare jobs than those that did not since the first expansions began last January. If this trend continues, Fitch Ratings says it could support a broader economic and tax base for state budgets and improve nonprofit hospital finances in those states.

The gains in healthcare jobs suggest that ACA expansion is generally positive for that sector's employment profile. However, the ACA is very broad legislation with a wide range of effects on state economies and budgets. We believe this healthcare job growth would need to continue into the longer term to be directly attributable to the ACA. Furthermore, it is uncertain how improvements like this will compare to other budget issues. The states that expanded ACA are also more exposed to potential federal deficit reduction efforts than non-expanding states.

The impact on nonprofit hospitals is more direct as it raises a hospital's number of patients with coverage. We believe revenue growth at hospitals in states that did not expand will generally be constrained by a larger number of uninsured patients amid modest volume growth and increasing bad debt related to higher patient co-pays and deductibles.

According to data from the Bureau of Labor Statistics, healthcare and social assistance jobs grew over 30% faster between December 2013 and December 2014 for 24 states that implemented ACA expansion on Jan. 1, 2014 than those that did not. On average, those states saw jobs in the healthcare and the social-assistance sectors grow by 2.4% YOY. Twenty-four states that didn't expand grew at 1.8%. Data for Alaska (a non-expansion state) and New Mexico (an expansion state) was not available.

Although Indiana recently agreed to expand, it was a non-expansion state in 2014. In that year, Indiana's overall employment grew at 2%, while healthcare jobs grew 0.2%. The surrounding states that expanded saw healthcare jobs grow 3x-8x faster, though their total employment growth trailed Indiana's in that same period.