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Understanding Obamacare: Health Care Reform Reduces Income Inequality

Feb. 3, 2014
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Question: Does Obamacare help prevent inequality?

Answer: Yes. The Affordable Care Act helps reduce a massive transfer of wealth that has been taking place in our private health care system from low- and middle-income families to large corporations and the wealthy. In fact, Obamacare has been said to do more to reduce income inequality than any other recently enacted legislation.

It helps to understand how the problem occurred. Health care hyperinflation in this country has been rampant. Here in Wisconsin, the cost of health care has risen 200% in 10 years, faster than average wages. And the group it hit the worst was the poor. With the average annual cost of health care being many thousands of dollars, too often people right on the margin saw their coverage slip through their fingers.

This meant that too many people didn’t get preventive services, relied on emergency rooms or otherwise were unprepared for medical disasters. All while more money went to administrative costs and CEO bonuses.

The Affordable Care Act recognizes that a mass of uninsured citizens is a net drag on the system—not to mention morally unsettling. That’s why the law makes access to care easier to get with tax credits and Medicaid. Low- and moderate-income earners can see low or even no monthly premiums for private coverage thanks to available tax credits.

Nationally, the Brookings Institution found that thanks to the Affordable Care Act’s improved access to health care, the real incomes of the bottom 20% of the population will increase. And by improving the income potential of low-wage earners we can reduce economic inequality overall.

The Affordable Care Act works to control rising health costs and expand access to care. Together these reforms make us a more equal—and just—society.

—Kevin Kane, lead organizer, Citizen Action of Wisconsin

The Shepherd Express and Citizen Action of Wisconsin will answer questions about the Affordable Care Act during its implementation. Got a question? Email editor@shepex.com


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