Is Obamacare really a wealth-care law?
A new study suggests the Affordable Care Act could reduce personal bankruptcies.
This post comes from Quentin Fottrell at partner site MarketWatch.
Health-care reform in Massachusetts has helped to improve credit scores, reduce debt and even cut the number of personal bankruptcies by 20%, a new study finds. Taken as a test case, some experts say this could bode well for Obamacare’s impact on the financial health of American households.
There are many similarities between the health-care reform in Massachusetts in 2006 and President Obama’s 2010 Affordable Care Act. Both aim to achieve near-universal coverage by combining a mandate for individual insurance with insurance market reforms and a broad expansion of subsidized coverage for low- and middle-income households, according to "The Effects of the Massachusetts Health Reform on Financial Distress" by economists at the Federal Reserve of Chicago and the University of Notre Dame.
"The context of our study is a major state-level reform that closely resembles the Affordable Care Act, making this analysis highly relevant for the ongoing debate surrounding the current federal program," economists Bhashkar Mazumder and Sarah Miller concluded.
The impact of reform on personal bankruptcy, delinquency and even credit scores was far more pronounced for those whose credit scores were lower before the reform. But those with higher credit scores before the reform -- and better access to credit -- experienced a larger relative decline in total debt, the authors found after analyzing credit report data that covered one-fifth of the Massachusetts population.
"Ideally, full implementation of federal health care reform will lower the out-of-pocket costs of health care enough to cause a similar decline in medical debt, one of the leading causes, along with layoffs and divorce, of bankruptcy filings," says Ed Mierzwinski, consumer program director for the non-profit U.S. Public Interest Research Group.
"This is the first study on health care reform to extend to measures of bankruptcy,” says Jonathan Gruber, a professor of economics at the Massachusetts Institute of Technology, who was also a principal designer of Massachusetts' health-care overhaul and consulted on the Affordable Care Act.
It confirms findings from a randomized expansion of Medicaid in Oregon, which showed enormous reductions in financial stress, Gruber says. (In that earlier study, "The Oregon Health Insurance Experiment," published in 2012 in the “Quarterly Journal of Economics,” Medicaid recipients who gained health insurance coverage in 2008 through a lottery reported less financial strain and fewer medical bills than those who didn’t receive any coverage through the lottery.)
But others doubt that the Affordable Care Act will have the same effect.
"Since Obamacare is extending Medicaid in 25 states, we would expect fewer medical bankruptcies amongst persons with incomes at or near the federal poverty line," says Stephanie Woolhandler, professor of public health at Hunter College in New York. "For the non-Medicaid-eligible population, the effect of Obamacare on medical bankruptcies is likely to be minimal. Even insured people may end up with ruinous out-of-pocket costs if they experience a prolonged or expensive illness."
Woolhandler co-authored a 2011 study on bankruptcy in Massachusetts, which found that medical bankruptcies eased only slightly to 52.9 percent in 2009 from 59.3 percent in 2007, but it only surveyed 199 bankruptcy filings.
Americans also face some strong headwinds. Although it's slowing, health-care inflation is still running at a faster pace than stagnant wage growth, says Steve Wojcik, vice president of public policy at the National Business Group on Health, a membership group for employers.
"That's a big threat to financial security," he says.
Obamacare will also reduce the total number of hours worked by about 1.5 percent to 2 percent from 2017 to 2024, according to data released this month from the Congressional Budget Office. "The Massachusetts study factored in unemployment rates as a variable to be controlled for rather than being affected by what they’re measuring," Wojcik says. To be sure, the CBO report refers to labor supply and participation -- meaning new job opportunities could also be created -- not actual jobs.
Obamacare will certainly help those who in the past would have declared bankruptcy and could not afford health care, says Wendell Potter, a former vice president of corporate communications at health insurer Cigna. It puts limits on how much insurers can charge people because of their age, provides subsidies for those with low incomes and prevents insurers from denying coverage to people with pre-existing conditions. Additionally, people under age 26 are covered under their parents’ insurance. It won’t protect them entirely, however.
"The sad reality is that even with the protections in the Massachusetts law and Obamacare, people who are in low-paying jobs and high-deductible plans are still at risk of bankruptcy if they get sick or injured," Potter says.
More from MarketWatch
No it is about redistribution of wealth.
How can something that offers subsidizes from the government be anything else?
Just another key stepping stone in transforming the US into a European styled socialistic economy with higher taxes, unionized work force, and punishing business regulations.
The liberal media just keeps looking for new ways to polish a t#rd, don't they?
Mass, has lost 1.2% of their population since they passed the insurance leech law.
Here is a promise dem bloodsuckers, the feds will not be allowed to bail you out, when you can no longer afford insurance.
You dem parasites are resposnible for this, promise you, we will make you pay for it.
First American Tyranny: We’re Cool With That
Why President Obama hasn’t been physically dragged out of office at this point is one of those questions that will likely remain a mystery.
In case you missed it, Obama this week (Jan. 17) declared to his Cabinet that if Congress doesn’t do what he wants it to do, he will simply use executive orders to create and enforce any law he chooses.
Based on the silence from my many liberal acquaintances, the response to Obama from the Left is “so what?”
Obama repeated his declaration to the Democratic members of Congress, who then walked out of the meeting without talking to reporters.
Did Obama talk too fast? Was he not speaking clearly?
For my hard-headed friends on the Left, let’s review:
The president of the United States just declared that Congress is null and void as far as he’s concerned.
Except for the fact that Congress will continue to burn through money like a hot knife through butter, and absent a formal declaration of dissolution, the Legislative Branch has effectively ceased to exist.
It’s still there in the sense that it occupies space, but that’s it.
Obama is acting like Jack Nicholson in “Mars Attacks”:
“I want the people to know that they still have two out of three branches of the government working for them, and that ain’t bad.”
Except the invader here isn’t from another planet or even another country.
We’ve just witnessed a home-grown coup. (And one that many of us saw coming even before Obama’s first presidential victory.)
We are now living — officially — in a dictatorship.
So where’s the outrage?
Is Twitter so fascinating that you just can’t be bothered?
Grumpy Cat got your tongue?
Bill Maher didn’t make fun of it, so it hasn’t happened?
Is it the fluoride in the water?
Is it the legalized pot?
Or is it that after years of dumbing down public education, we are simply too stupid to realize what just happened?
Another review for the Left:
The government derives its authority from the people. The Constitution is the contract that limits and defines what the government can do. The president under the contract is supposed to work with Congress and enforce the laws that Congress passes.
President Obama has just said he will not follow that contract he has with the people. He has broken the contract.
No Constitution, no presidency.
So if Obama, despite breaking his contract, continues to accept and enjoy all the perks of the president’s office while failing to honor his obligations, that makes him something else other than the president.
I used to wonder how millions of Germans could allow a dictator to come to power.
We are now demonstrating exactly how it happens.
Japan has an insurane based health care system. They first said insurances were not allowed to make a profit on health care. Then they regulated the cost of medical care and medicines. America is all about the profit for shareholders. Japan is nuimber 10 now while America is number 37. Hmmmmm
What I find amusing about Obamacare is that it's clearly a redistribution of wealth. What's even funnier is it's a redistribution of wealth from the poor to the rich. If an insurance company doesn't make the kind of profit they expect to make, the tax payer will be on the bill to subsidize them. Tax payers also pay for Medicaid expansion, money that will go to hospitals and healthcare businesses, and they also pay for subsidies, money that goes to the insurance company. All insurance companies have to do is supply new services that were grossly marked up in the first place, take more money for themselves, as they already are, then "claim" that they aren't making a profit, and bingo, you are, yet again, paying for the rich to become richer, doesn't it just remind you of the Bailouts?
By the way, for you idiots who support Single Payer/Govt Run healthcare, lets look at the facts. All healthcare organizations combined spent about $1 Billion on advertising, and total of about $1.6 Billion on paying CEO salaries. We spend $2.6 TRILLION a year on healthcare, which means the "Greedy" CEO's and advertisers account for 0.1% of healthcare costs, it's imperceptible, and basically doesn't affect the cost of care. What's a really big problem are the very high administrative costs, which account for $407 Billion, or 15.7% of healthcare spending. This is primarily due to purchasing the newest equipment possible. It's purchased because doctors are afraid of lawsuits, many of which can be avoided if they test for everything, and test with the newest equipment. Lawsuits in potential can account for as much as 35% of healthcare spending, as the majority of devices, equipment, drugs, ect are given out to avoid lawsuits. We can easily slash those costs if we can put into place reasonable protections for doctors and healthcare officials so that they can only be sued for gross negligence, and only for a very limited amount.
Either way, our main problem in this country isn't healthcare, it's about our lifestyles and food choices. We eat more processed food than any other country on Earth, and' it's easy to see why. Because of subsidies, we can actually buy processed food at a lower price than it costs to make. No other country on Earth, that I'm aware of, does anything even close to that, and because of that, we pay for it with our health. We eat too much sugars and fats, and not enough vitamins and minerals. Sugars and fats feed health problems, especially cancer, and destroy healthy cells and the immune system. Even if Single Payer is more efficient (it's not) and cheaper, it's not going to solve the main problem, we are making ourselves sicker and sicker, and as long as we do that, healthcare costs are going to keep going up.
If you like your Dr., you can keep your Dr. Perod.
More obama lies...........
REMEMBER BENGHAZI 2014 & 2016!
Vote to get your country back people.
MSNBC ..LAND OF ...DUH...
OBAMACARE..WAS / IS....ALWAYS..about.... "CONTROL".....of ALL AMERICANS..
CONTROL Healthcare and You CONTROL....ALL THE PEOPLE...
IF YOU ..LIKE YOUR PLAN......................YOU CAN......KEEP IT..
IF YOU LIKE YOUR DOCTOR...................YOU CAN.....KEEP HIM
IF YOU LIKE YOUR GUNS..........................YOU CAN ...KEEP THEM
IF YOU LIKE........MY PROMISES.................YOU CAN...KEEP,,,,,,,,,,,,,,,,DREAMING
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
ABOUT SMART SPENDING
LATEST BLOG POSTS
If you're one of the millions of sleep-deprived Americans, here's how to find cheap sleep without pills.
VIDEO ON MSN MONEY
BLOGS WE LIKE
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'