According to a new report from the U.S. Department of Commerce’s Bureau of Economic Analysis (BEA), the health reform law is having a positive effect on personal incomes and spending. According to the BEA, Obamacare accounted for about three quarters of the overall rise in Americans’ incomes in January.
Personal incomes rose by 0.3 percent during the first month of the year — and the BEA explains that’s partly because of the impact of the health law’s consumer benefits. Obamacare’s Medicaid expansion increased public health insurance benefits by about $19.2 billion. And the new refundable tax credits under health reform, like the subsidies available to help American purchase new plans in Obamacare’s marketplaces, totaled about $14.7 billion.
“Personal income in January was boosted by several provisions of the Affordable Care Act (ACA), which affected government social benefit payments to persons,” the BEA concluded.
The financial impacts of health reform are most evident among the sectors of the population that are struggling to stay out of poverty. A recent study by the Brookings Institute found that Obamacare has the potential to boost the incomes of the poorest Americans by anywhere from five to seven percent. In order to arrive at that figure, researchers took out-of-pocket medical expenses into account, which can be prohibitively expensive. The rising cost of health care has been squeezing Americans for years, and one in four U.S. families say they struggle to pay their medical bills.
Some researchers are optimistic that Obamacare will eventually be able to protect Americans at all income levels from “financial distress,” and lower the rate of people who end up going bankrupt after one catastrophic medical event. At least one study into the health reform law in Massachusetts, which served as the model for Obamacare in many ways, concluded that reform can reduce people’s debt and improve their credit scores.
But, although Obamacare takes some steps forward in this area, it won’t solve these issues altogether. Researchers who study medical bankruptcies believe they’re ultimately a result of tying health insurance to market concerns, and point out that countries with universal health care systems are the ones that have made the most progress toward eliminating them.