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Monday, April 1, 2013

Obamacare Enters Its Big Year for Fighting Poverty

Obamacare, the Affordable Care Act (ACA), had its third birthday over this past weekend. So this is its first work week in its most important year. This is the year for the ACA’s heavy lifting, bringing affordable health coverage to 36 million uninsured Americans and ending discrimination against adults with pre-existing conditions, all effective as of January 2014. This is the year that the ACA becomes the biggest single measure in the fight against poverty in the last 50 years.
The ACA, of course, is usually discussed in terms of its impact on the health care system. And it is already doing a significant job on that front. In its birthday editorial, the New York Times aptly summarized the important contributions to reform of the health care system that the ACA has already produced:

That is a substantial list of accomplishments; moreover, the health care system is due for its most important improvements in the coming year. The upcoming big changes, however, will have an impact that should be understood in more than just health care terms. The progress that will be made in the fight against poverty will be truly remarkable.  

Half of the gain in covering the uninsured will be directed at people in the deepest poverty in our country. Since Medicaid began in 1965, it has had a gap. It never offered coverage to people aged 19-64 who are not officially disabled and not caring for a child in their home. 

These are young adults leaving high school or college (whose parents do not have employer-supported coverage); empty nest parents whose children are over 18; tens of thousands of veterans not covered by VA health programs (over 12,000 would gain Medicaid coverage just in my home state of Illinois); chronically unemployed people with serious mental and physical impairments who are not officially disabled; many of the homeless; and others. The ACA will fill that gap in Medicaid , providing coverage to all with income under 138% of the Federal Poverty Line ($15,415 per year for an individual and $26,344 for a family of three) in the states that choose to take the federal money that the ACA offers them to pay for it.

For many people in poverty, health coverage not only means health, reduction in pain, and expansion of life expectancy, it also means employability and productivity and upward mobility. It can improve learning capacity. It reduces family stress. It can be a major factor in reducing family and community violence. It is a vast improvement in quality of life and quality of opportunity.

The ACA also ends the high cost for Medicaid beneficiaries of making more money. Currently, when a Medicaid beneficiary succeeds in the workplace and escapes poverty, there is a penalty: the loss of health coverage when earnings exceed allowed Medicaid levels. Starting in January, though, the Healthcare Marketplaces in every state will offer affordable private insurance coverage to replace Medicaid when earnings call for termination of Medicaid eligibility. This private coverage removes a barrier to upward mobility. It also acts as a net to keep workers in the middle class if they lose employer-supported insurance, when a health emergency might otherwise mean a free-fall into poverty. And it is there to provide coverage for budding entrepreneurs who want to try for the American Dream and start their own businesses, but who currently are blocked because they cannot risk losing either Medicaid or employer-supported coverage.     

Obamacare already fights poverty by helping seniors on Medicare make ends meet and by helping young adults make their way in the workforce by staying on their parents’ insurance. And in the coming year, at least in the states that implement it thoroughly, Obamacare will make its biggest inroads against poverty.  

John Bouman
President, Sargent Shriver National Center on Poverty Law

(This guest blog was originally posted here in the Shriver Brief) 

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