Obamacare Will Reduce Income Inequality, but Quietly

Traditional measures of income don’t account for health insurance, but a new study shows the law will greatly improve the fortunes of America’s bottom fifth.

WASHINGTON, DC - JANUARY 10: U.S. President Barack Obama listens during a meeting with young citizens at Columbia Height's restaurant The Coupe on January 10, 2014 in Washington, DC. Obama met with some of the people helping with healthcare enroll efforts, their experiences in spreading the word about the importance of signing up for affordable health insurance and thanked them for their efforts. 
National Journal
Clara Ritger
Jan. 28, 2014, 10:40 a.m.

As the pres­id­ent pre­pares to sign an ex­ec­ut­ive or­der rais­ing the min­im­um wage for some fed­er­al con­tract­ors, an­oth­er of his sig­na­ture ini­ti­at­ives is quietly clos­ing the in­come dis­par­ity in Amer­ica, a new study finds.

The Af­ford­able Care Act will boost the av­er­age in­comes of the bot­tom fifth of wage earners, ac­cord­ing to a Brook­ings In­sti­tu­tion re­port, by nearly 6 per­cent in 2016.

Health in­sur­ance premi­um as­sist­ance and ex­pan­ded Medi­caid cov­er­age are two primary factors con­trib­ut­ing to the rise, the re­port says. Both pro­vi­sions tar­get low wage earners, and the cost of the pro­grams are off­set by taxes dis­trib­uted across the pop­u­la­tion.

Such a “re­dis­tri­bu­tion of wealth” has been de­mon­ized by Re­pub­lic­ans, but more than $1 tril­lion will be col­lec­ted from high- and middle-in­come earners to be made avail­able as sub­sidies for people earn­ing be­low 400 per­cent of the fed­er­al poverty line — a big step to­ward mak­ing in­come more equal in the U.S. Payroll taxes and the “Ca­dillac” tax on ex­pens­ive health in­sur­ance plans are two Obama­care pro­vi­sions that tar­get the highest wage earners in the coun­try.

But low-in­come, eld­erly, and minor­ity Amer­ic­ans will also be ad­versely af­fected by cuts to the Medi­care pro­gram, as well as by the de­cision by roughly half of states to opt out of Medi­caid ex­pan­sion. It’s partly why the bot­tom tenth of wage earners will only see an av­er­age in­come rise of roughly 7 per­cent as the law takes ef­fect.

“The Af­ford­able Care Act does not do a lot for the bot­tom decile be­cause we’ve already taken care of the bot­tom decile,” said Mar­ilyn Moon, dir­ect­or of the non­profit, non­par­tis­an Amer­ic­an In­sti­tutes for Re­search Cen­ter on Aging. “What it does is fill in the be­ne­fits for more Amer­ic­ans at the bot­tom.”

To read the com­plete study, click here.

What We're Following See More »
SUFFOLK POLL
New Survey Shows Clinton Up 9 in Pennsylvania
2 hours ago
THE LATEST

If a new poll is to be believed, Hillary Clinton has a big lead in the all-important swing state of Pennsylvania. A new Suffolk University survey shows her ahead of Donald Trump, 50%-41%. In a four-way race, she maintains her nine-point lead, 46%-37%. "Pennsylvania has voted Democratic in the past six presidential elections, going back to Bill Clinton’s first win in 1992. Yet it is a rust belt state that could be in play, as indicated by recent general-election polling showing a close race."

Source:
$500 MILLION PROJECT
Obama Library Heading to Jackson Park in Chicago
3 hours ago
THE DETAILS

"President Barack Obama has chosen Jackson Park, a lakefront park that once hosted the world’s fair on the city’s South Side, for his $500 million presidential library, according to a person familiar with the matter."

Source:
THREE NIGHTS RUNNING
Democrats Beat Republicans in Convention Ratings So Far
3 hours ago
THE DETAILS

Wednesday was the third night in a row that the Democratic convention enjoyed a ratings win over the Republican convention last week. Which might have prompted a fundraising email from Donald Trump exhorting supporters not to watch. "Unless you want to be lied to, belittled, and attacked for your beliefs, don't watch Hillary's DNC speech tonight," the email read. "Instead, help Donald Trump hold her accountable, call out her lies and fight back against her nasty attacks."

Source:
THE QUESTION
How Many VIPs Were the Secret Service Protecting in Philly Last Night?
5 hours ago
THE ANSWER

Seven, according to an official Secret Service tweet.

Source:
‘MOGUL,’ ‘DAREDEVIL’
Candidates’ Code Names Revealed
5 hours ago
WHY WE CARE

The Clintons will retain their Secret Service "code names from the last time they lived in the White House. Hillary Clinton is EVERGREEN and Bill ClintonEAGLE. Donald Trump is MOGUL, according to reports, and Melania Trump MUSE. The vice presidents get code names, too: Mike Pence is HOOSIER—a little on the nose—and his wife HUMMINGBIRD. Tim Kaine is DAREDEVIL, somewhat ambitiously. His wife's? To be determined."

Source:
×