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 »
SEVEN-POINT LEAD IN A FOUR-WAY
Quinnipiac Has Clinton Over 50%
2 hours ago
THE LATEST

Hillary Clinton leads Donald Trump 51%-41% in a new Quinnipiac poll released today. Her lead shrinks to seven points when the third-party candidates are included. In that scenario, she leads 45%-38%, with Gary Johnson pulling 10% and Jill Stein at 4%.

Source:
PROCEDURES NOT FOLLOWED
Trump Not on Ballot in Minnesota
4 hours ago
THE LATEST
MIGHT STILL ACCEPT FOREIGN AND CORPORATE MONEY
Chelsea to Stay on Board of Clinton Foundation
4 hours ago
THE LATEST

Is the Clinton family backtracking on some of its promises to insulate the White House from the Clinton Foundation? Opposition researchers will certainly try to portray it that way. A foundation spokesman said yesterday that Chelsea Clinton will stay on its board, and that the "foundation’s largest project, the Clinton Health Access Initiative, might continue to accept foreign government and corporate funding."

Source:
INTERCEPT IN MIDDLE EAST
Navy Calls Iranian Ships’ Actions Dangerous, Unprofessional
5 hours ago
THE LATEST

"Four Iranian ships made reckless maneuvers close to a U.S. warship this week, the Pentagon said Thursday, in an incident that officials said could have led to dangerous escalation." The four Iranian vessels engaged in a "high-speed intercept" of a U.S. destroyer in the Strait of Hormuz. A Navy spokesman said the Iranina actions "created a dangerous, harassing situation that could have led to further escalation including additional defensive measures" by the destroyer.

Source:
$300 SAVINGS CARD
Under Pressure, EpiPen Maker Drops Prices
6 hours ago
THE LATEST

Amid public outcry and the threat of investigation by the Senate Judiciary Committee, Mylan has agreed to effectively drop the price of EpiPens. "The company, which did not lower the drug's list price, said it would reduce the patient cost of EpiPen through the use of a savings card, which will cover up to $300 of EpiPen 2-Pak."

Source:
×