What The Media Should Tell You About Obamacare And Inequality

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.

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