STUDY: Obamacare Will Raise The Poorest Americans’ Incomes By At Least 5 Percent

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"STUDY: Obamacare Will Raise The Poorest Americans’ Incomes By At Least 5 Percent"

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A new study by the Brookings Institute finds that Obamacare’s private insurance subsidies and Medicaid expansion will have the effect of raising the poorest Americans’ incomes by anywhere from five to seven percent.

Traditional measures of income and poverty don’t take health insurance coverage and out-of-pocket medical expense into account. For the study, the Brookings researchers came up with several alternative metrics that incorporate the value of employer and government health care subsidies into a person’s total income.

“Under our broadest and most comprehensive income measure we project that incomes in the bottom one-fifth of the distribution will increase almost 6 percent; those in the bottom one-tenth of the distribution will rise more than 7 percent [under health reform],” concluded the researchers.

The study also finds that another six percent of the poorest Americans would have benefited from the Affordable Care Act had the Supreme Court not made Obamacare’s Medicaid expansion optional.

Medical care in America can be prohibitively expensive — especially for the uninsured and the under-insured. The average emergency room visit costs 40 percent more than what most Americans spend on their rent every month, and an overnight hospital stay can easily cost $10,000. By some researchers’ estimates, medical bills are the biggest cause of bankruptcies in the United States.

Before the health reform law went into effect, individual insurance policies were free to hike premiums as their customers’ health status worsened, and often shifted costs onto consumers by limiting benefits or setting massive deductibles. But Obamacare bans many of those practices, limiting Americans’ annual out-of-pocket costs to about $6,300 while offering premium subsidies on a sliding scale based on income — making it particularly beneficial for the poor.

For instance, a lifelong Republican and former Obamacare skeptic from Arkansas told ThinkProgress last fall that the individual plan he bought in 1997 eventually devolved into one that charged him over $1,000 per month in premiums and had a $10,000 deductible. Under Obamacare, he has to pay nothing in monthly premiums and has just a $750 deductible, saving him at least $13,000 per year.

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