WASHINGTON — The Affordable Care Act will increase income for the poorest 20 percent of Americans because of the value of the subsidies – an unintended benefit of the health care law, a Brookings Institution study released Monday said.
Although the ACA was not intended to affect income, “it’s going to affect the income distribution to some degree,” said Gary Burtless, one of the authors of the study.
The study looked into the value of health insurance subsidies and the impact those benefits will have on family income. As a result of the ACA, those in the bottom one-fifth of income distribution will see an average income increase of 6 percent, the study found. The money to fund the increase will come largely from new taxes on the wealthiest Americans.
Uwe Reinhardt, an economics professor at Princeton University, cautioned that the conclusions of the study should be viewed with the understanding that considering health benefits as an addition to income is not a perfect model. Unlike regular income, health benefits can only be used to pay for health care, not for other goods and services, such as groceries.
But Marilyn Moon, director of the health program at the American Institutes for Research, said the bottom line is more resources for the poorest Americans.
“There is so much emphasis right now on the issue of inequality,” said Moon. “I think that this paper demonstrates, as it should, that it does help to redirect resources to those who are less well off overall.”
The study found benefits for low-income families because of the ACA will be “substantially smaller” than they would have been had the Supreme Court not struck down part of the law in 2012, Burtless said.
The court ruled states could not be forced to expand eligibility limits for Medicaid.
The ACA will have the greatest impact on the incomes of those who will obtain insurance because of the law, according to the study. Those who already have insurance will not see much change in their insurance benefits.
