New research reveals that the Affordable Care Act has a relatively strong effect on reducing income inequality and economic insecurity for low-income Americans. However, given past coverage of the law, this fact is likely to go underreported in media.
A new study from the non-partisan Brookings Institution projects the Affordable Care Act (ACA, or "Obamacare") to positively impact low-income Americans. The research, performed by economists Henry Aaron and Gary Burtless, reviews a comprehensive income measure combining wages, the value of employer-provided health insurance, and the value of government-subsidized coverage. The authors project that the ACA will increase incomes in the bottom-fifth of the population by almost 6 percent, while increasing incomes in the bottom-tenth of the population by more than 7 percent.
Additionally, the authors found that positive "benefits of the ACA to low-income families would have been greater if the enacted version of the law had been put into effect." According to the study, the Supreme Court's landmark 2012 decision upholding the law, but allowing states to opt-out of expanding Medicaid to low-income residents, has dampened the effectiveness of health care reform -- preventing nearly 6 percent of the American population in the lowest 20 percent of income earners from accessing free health coverage through Medicaid. If not for the Supreme Court's decision, and corresponding "state inaction," the relatively strong impact of the ACA in reducing inequality for low-income Americans would have been greater.
The study concludes that, while the ACA does not positively impact the income of all Americans, the "small proportional drops in income" correspond with "larger proportional gains" for the poorest quarter of the working population. The graph below shows the average expected impact of the ACA on after-tax adjusted incomes for each tenth of the wage spectrum. The results show that corresponding positive impacts at the bottom of the income bracket more than make up for marginal decreases at higher income levels.
Previous Media Matters research has exposed how the media almost never mentions the positive impact of health insurance access on reducing economic inequality and strengthening economic security. Instead, media outlets opted to focus on the difficult rollout of Obamacare health care exchanges -- notably Healthcare.gov. The lack of discussion regarding the positive impact of the ACA on reducing economic inequality is particularly pervasive among right-wing media, where policy proposals aimed at reducing inequality are treated as trivial and unimportant.
Image via southerntabitha using a creative commons license
Right-wing media have spent the last few years baselessly dismissing the decades-long push to alleviate poverty as not worth the fight, despite evidence showing that government efforts to reduce poverty have been successful.
On January 8, 1964, President Lyndon B. Johnson used his State of the Union address to enumerate proposals that would come to be known as the War on Poverty. Many of the proposals and policy prescriptions outlined in the president's speech were eventually signed into law.
Recent research from the Columbia Population Research Center at Columbia University reveals the extent to which anti-poverty programs since the 1960s have alleviated poverty for millions of Americans. The study, titled "Trends in Poverty with an Anchored Supplemental Poverty Measure," uses a uniform measure of poverty (supplemental poverty measure or SPM) to show a dramatic drop-off in poverty rates from 1967 to 2011. From the study (emphasis added):
The OPM shows the overall poverty rates to be nearly the same in 1967 and 2011 -- at 14% and 15% respectively. But our counterfactual estimates using the anchored SPM show that without taxes and other government programs, poverty would have been roughly flat at 27-29%, while with government benefits poverty has fallen from 26% to 16% -- a 40% reduction. Government programs today are cutting poverty nearly in half (from 29% to 16%) while in 1967 they only cut poverty by about one percentage point.
Today, despite mounting evidence of their success, the corresponding anti-poverty programs created during the War on Poverty face incessant and withering criticism from conservative politicians and their right-wing media allies. Conservative media voices regularly repeat the claim that anti-poverty programs are useless, or that after 50 years they are no longer working. In fact, as recently as January 7, Fox News host Martha MacCallum cast doubt on whether or not lowering the poverty rate over the past five decades was worth the effort, but the following graph from The New York Times' Economix blog shows just how effective these programs have been:
Source: The New York Times, Economix Blog, "The War On Poverty at 50"
In addition to questioning the general efficacy of anti-poverty relief efforts, right-wing media voices have targeted specific Johnson-era programs and initiatives like Social Security, Medicare and Medicaid, expanded food stamps and welfare, and an increased minimum wage in their coordinated attempt to undermine the social safety net, effectively stymying the purpose of the War on Poverty.
Much of the Affordable Care Act (the ACA, also known as Obamacare), went into effect on January 1, 2014. Major evening news broadcasts focused on different aspects of the law's effects and the extent to which the law will benefit consumers.
Fox Business host David Asman baselessly speculated that health care reform's Medicaid expansion could bankrupt states, a prediction at odds with economic experts who have declared the expansion "a very favorable financial deal for states."
The Affordable Care Act allows states to expand Medicaid programs to provide coverage for people whose income falls below 138 percent of the federal poverty level. Initially, the federal government covers the full cost of new enrollees. After 2016, the federal government will continue to pay 90 percent of the program's cost.
On the December 11 edition of Fox News' America's News HQ, Asman warned that new Medicaid enrollees who became eligible for coverage due to the Affordable Care Act's would be covered at "an extraordinary extra cost to taxpayers." Asman went so far as to claim the cost could bankrupt states:
ASMAN: States are spending 30 - 40 percent of their entire budget on Medicaid. And as these more people sign on to Medicaid because of Obamacare, they're going to not only cost us taxpayers more money on the federal level, but they may make some states go bankrupt, because they won't be able to keep up with all those extra Medicaid patients.
Expanding Medicaid would not only not bankrupt states, according to the Center on Budget and Policy Priorities (CBPP), it "will add very little to what states would have spent on Medicaid without health reform." CBPP found that "Expanding Medicaid is thus a very favorable financial deal for states":
Fox News claimed the Obamacare rollout has "clearly" been worse for the American people than the government shutdown, because the shutdown's "biggest inconvenience" was a few closed national parks and memorials -- ignoring the shutdown's cuts to domestic violence centers, women and children's food and health care, stalled scientific research, and severe economic losses.
On the November 11 edition of Fox News' Fox & Friends, co-host Steve Doocy and Fox legal analyst Andrew Napolitano held a "pop quiz" to determine "[w]hich was more harmful to your personal freedoms," Obamacare or the government shutdown? Both decided that there was no contest: Doocy proclaimed that Obamacare was "clearly" worse than the "slimdown," and Napolitano agreed that it was "[n]ot even a close call." As evidence, Napolitano pointed out that "the biggest inconvenience" of the government shutdown was "a couple hundred well-intended people trying to get into national parks and monuments and the government had closed them." In contrast, he claimed that Obamacare hurts people by forcing them to buy expensive "high end, one-size-fits-all" health insurance policies.
Fox's faulty comparison ignored the significant impacts of the government shutdown, which harmed the economy and slashed funding to necessary programs for low-income Americans.
Because of the shutdown, the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), a program that helps provide health care for at-risk babies and "helps new mothers feed themselves and their babies properly," saw its funding slashed, and states that were unable to lend the program local funds were forced to stop accepting enrollees. The shutdown also cut federal funding to at least 2,000 shelters for victims of domestic abuse, workplace safety inspections were halted, federal workers stopped inspecting toxic waste sites, and the CDC stopped monitoring the spread of the flu. National Geographic further reported that the shutdown caused long-term setbacks in scientific research, and The Washington Post detailed how the shutdown's fallout cost low-income workers their economic stability.
The shutdown also did lasting damage to the U.S. economy. Moody's Analytics estimated that the shutdown "cut real GDP by $20 billion, shaving half a percentage point off growth in the fourth quarter," according to a Congressional Research Service (CRS) report. CRS also noted that "JP Morgan Chase's chief economist was quoted as estimating that the shutdown reduced fourth quarter growth by 0.5 percentage points, with half the reduction attributable to lower government spending and half to 'spillover effects and lost activity' in the rest of the economy." The shutdown also eroded consumer confidence and may have derailed our gradual economic recovery, and economists argue that the shutdown will have lingering effects on the labor market and overall economy for several months.
Napolitano's argument that "5,500,000 innocent Americans were told they don't - they won't have health insurance on January 1st" is also inaccurate. Fox has repeatedly worked to hide the fact that rather than losing coverage outright, most of these consumers are simply being offered new, often better, options because policies will be required to include basic standards of care. Moreover, the rollout of the Affordable Care Act, though rocky, has successfully allowed hundreds of thousands of Americans to sign up for Medicaid.
Fox News overstated the costs of Medicaid expansion for states by ignoring research and evidence showing that expanding Medicaid actually saves money for many states because of the high share of the cost being picked up by the federal government in the Affordable Care Act (ACA) and the reductions in money spent by states on uncompensated care.
Fox News obscured Republicans' role in creating a Medicaid coverage gap in the administration's health care expansion to hype one woman's coverage loss as an example of Obama's broken promises.
Fox host Elisabeth Hasselbeck welcomed guest Tammy Fiechtner onto the November 1 Fox & Friends to discuss a letter she received from her insurer explaining that she's being automatically moved to a new insurance plan. Hasselbeck hyped "what's being called the Obamacare coverage gap," saying, despite the letter, that she "hasn't gotten a new plan. In fact, she doesn't have coverage at all." Fiechtner's comments shed more light on her predicament; the new plan she was being moved to had a similar premium, but a higher deductible. Fiechtner then explained that after exploring her options, she found that she would have qualified for Medicaid coverage under the Affordable Care Act (ACA)'s expansion of the program, but her Republican-led home state of Nebraska chose not to accept the Medicaid expansion (emphasis added):
FIECHTNER: When we went on the website, we found out that we didn't qualify for Obamacare because of how our business structure works. So, we were told that we had to go on Medicaid, which I don't understand why I have to be on Medicaid, but that's where they directed us to. Nebraska did not expand Medicaid, so there will be no help for people like ourselves. So we now are forced to buy a new plan all on own and face these expenses by ourselves.
As The New York Times reported, the ACA was "written to require all Americans to have health coverage" and "about 30 million uninsured Americans were to have become eligible for financial help" through subsidies for lower-income earners and the Medicaid expansion. According to the Times, the Supreme Court's 2012 decision to allow states to opt out of the Medicaid expansion left millions of low-income consumers without financial help in acquiring insurance:
But the Supreme Court's ruling on the health care law last year, while upholding it, allowed states to choose whether to expand Medicaid. Those that opted not to leave about eight million uninsured people who live in poverty ($19,530 for a family of three) without any assistance at all.
Hasselbeck's attempt to lay the blame for Fiechtner's situation on President Obama papers over Republicans' role in sabotaging access to affordable health insurance. As Politico reported in a November 1 story headlined "The Obamacare sabotage campaign," there is "a strong factual basis" for the charge that "calculated sabotage by Republicans at every step" has undermined key points of the law -- including the Medicaid expansion -- and has seriously damaged the overall rollout (emphasis added):
In the week following the end of the 16-day government shutdown, major print media outlets shifted their attention to upcoming bipartisan budget negotiations. This coverage of budget priorities was far more likely to mention the need for deficit and debt reduction than economic growth and job creation, despite economists warning that growth is the more pressing concern.
The Wall Street Journal attacked the Affordable Care Act's (ACA) Medicaid expansion by claiming that Medicaid beneficiaries would have better health outcomes with no insurance at all. But the Journal's analysis relies on an inaccurate reading of an Oregon health care study and ignores that Medicaid has been shown to lower rates of depression, reduce financial strain, and benefits low-income children, mothers, and veterans.
During her first week as a Fox News host, Elisabeth Hasselbeck ran daily "Eyes On Obamacare" segments that pushed falsehoods and myths about the Affordable Care Act (ACA).
On September 16, Hasselbeck hosted FoxBusiness.com reporter Kate Rogers to spread fear about some insurers dropping out of some states' individual health care markets, alleging that the law would increase the cost of health insurance.
But a report released by the Kaiser Family Foundation early in September found that the cost of obtaining health insurance will be lower than expected:
This report -based on 17 states and the District of Columbia that have made data publicly available -provides a preview of how premiums will vary across the country, and how much consumers in different circumstances will actually pay after taking into account the tax credits available under the ACA.
While premiums will vary significantly across the country, they are generally lower than expected. For example, we estimate that the latest projections from the Congressional Budget Office imply that the premium for a 40-year-old in the second lowest cost silver plan would average $320 per month nationally. Fifteen of the eighteen rating areas we examined have premiums below this level, suggesting that the cost of coverage for consumers and the federal budgetary cost for tax credits will be lower than anticipated.
The Department of Health and Human Services also released a report on September 16 that shows 56 percent of uninsured Americans could obtain health insurance for less than $100 per month. From the report's press release:
A new report released today by the Department of Health and Human Services (HHS) shows that 56 percent, or nearly six in ten of the people who don't have health insurance today may be able to get coverage through the Health Insurance Marketplace for less than $100 per month.
Of the 41.3 million individuals who are uninsured and eligible for coverage, 23.2 million (56 percent) may qualify for Medicaid, the Children's Health Insurance Program, or tax credits to purchase coverage for $100 or less per month. The amount an individual will save on premiums depends on their family income and size. Today's report uses data about family income and size from the Census Bureau's American Community Survey to estimate the number of uninsured individuals who will qualify for lower costs on monthly premiums.
Today's report also shows that if all 50 states took advantage of new options to expand Medicaid coverage, nearly 8 out of every 10 people (78 percent) who currently do not have insurance could be paying less than $100 a month for coverage under the Affordable Care Act. While some states are expanding their Medicaid programs in 2014, other states are not doing so.
Right-wing organization Media Trackers Florida called support for Medicaid expansion "leftist Florida advocacy" by hyping misleading claims about the cost of expansion. However, the cost estimate used by Media Trackers failed to take into account millions of dollars in savings while insuring almost one million Floridians.
WatchdogVA, an affiliate of the Koch Brothers funded Franklin Center, promoted unsubstantiated fears in asking legislators to weigh several considerations when determining how to expand Medicaid in Virginia, including fears over the federal government's role and a doctor shortage. The conservative blog also recommended block granting or privatizing the program, both of which would have disastrous consequences on Medicaid.
Right-wing media have seized on a study of Medicaid recipients to attack the program by focusing on certain parts of the findings while health care experts point out that the program successfully expanded access to care and eased health-related financial problems, the primary focus of Medicaid.
In 2008, the state of Oregon held a lottery to expand Medicaid coverage to 10,000 people. Because the selection was random, researchers began a controlled study on how the coverage affected the participants. After the results were posted in The New England Journal of Medicine, right-wing media seized on the findings to attack both Medicaid and health care reform. On May 2, Fox Nation posted a Washington Examiner article on the study under the headline "Landmark Study Shatters Liberal Health Care Claims." In the article, Examiner senior editorial writer Philip Klein noted that the study's authors found that enrollment in Medicaid led to "lower rates of depression," but Klein wrote that "the study suggests that expanding Medicaid ... does not improve" the health of recipients. On Your World, Fox's senior managing editor for health news, Dr. Manny Alvarez, used the findings to attack the Affordable Care Act (ACA):
On May 3, Fox & Friends co-host Steve Doocy called the Medicaid study "[b]ad news for Democrats who support Obamacare." On-screen text during the segment stated that the study found that Medicaid is "ineffective":
But while Fox used the study as an opportunity to attack various aspects of health care reform, experts have pointed out that the study's findings, while not entirely positive, show that the program aided the new enrollees in several ways. In a Health Affairs blog post, Dr. John Lumpkin, who served for 12 years as the director of the Illinois Department of Public Health, wrote that the study showed that "coverage alone will not necessarily lead to good health," but also pointed to the "big impact on family finances" and the fact that "expanding Medicaid was shown to substantially reduce depression." Dr. Lumpkin concluded:
So far, the Oregon Health Insurance Study shows us that people who obtained Medicaid coverage received more health care services in the first two years--especially needed preventive care--and had less depression and financial worries. Their health outcomes weren't significantly better, but at least they are now participating in the health care system and getting the care they need, without plunging their families deeper into poverty. From this vantage point, the glass seems more than half full.
National Review Online attacked a program that would make released inmates eligible for Medicaid as an "expensive addition" to the program, despite praise from experts who have pointed to the policy's potential to cut health care costs.
An NRO post attacked a provision in the Affordable Care Act which would make recently released prisoners eligible for Medicaid benefits. The blog attacked the program as an "expensive addition" to Medicaid, later complaining that "monumental poor life choices, including the ones felons have made ... will be subsidized by" taxpayers:
Obamacare expands Medicaid enrollment substantially. To deny someone enrollment because he'd served time in prison would surely violate the underlying intent of giving everyone equal health care. And if affordable health care is now a right, to deprive former felons would be to impose a punishment in addition to their original sentence. So to some extent, felons' new Medicaid eligibility makes legal sense.
But there's nevertheless an annoying hypocrisy here.
As Bloomberg's recent soda campaign so aptly demonstrated, once health care becomes a public expense, personal choices become a public concern. Taxpayers can expect to be nagged about small poor life choices like opting for a bigger beverage or a higher-calorie meal choice.
But monumental poor life choices, including the ones felons have made -- which result in lower incomes and worse health -- will be subsidized by those same taxpayers.
It may be equal, but it doesn't seem very fair.
But experts have pointed out that the program could lead to an overall reduction in health care spending. A Pew Stateline article quoted proponents of the program who explained that making released inmates eligible for Medicaid would reduce medical costs by providing access to preventive care and reducing the use of emergency care as a primary health care provider:
Fox News host Neil Cavuto and Fox guest Stephen Moore agreed that President Obama is wrong to suggest that federal spending growth is driven by health care costs, when in fact Obama is right. Health care spending is the only category of federal spending projected to grow substantially over the next two decades, and government health insurance is actually more efficient than private sector insurance. And the president's Patient Protection and Affordable Care Act contains provisions that aims to contain and reduce national health care costs.