Affordable Care Act Focuses on Workers, Removes Perverse Incentives

President Obama’s Affordable Care Act (ACA) was not directed at the poorest Americans, who already have Medicaid, but at the working poor. This includes those who work full-time, but cannot afford their own health insurance policy. In addition, low-wage jobs are far less likely to provide health insurance benefits. Thus, typical low-wage earners are left on their own to purchase prohibitively expensive private health care plans. In 2010, the average cost for a private family insurance plan was $7,102. In many locales throughout the U.S., it is mathematically impossible for a low-wage breadwinner to pay for a $7K private insurance plan while paying for all other essential family expenses. What’s worse, before ACA, if one became seriously ill and required extensive treatment and thus could not work for a long period, they would often lose their job, and with it, their health insurance. Some conservatives counter-argue that only those who work hard deserve health insurance and good health care. But this argument is a non-sequitur. Health insurance is generally unaffordable for the working poor and even parts of the working middle class, who as I pointed out in one of my last posts, work more hours on average than the wealthy.

Another thing to consider are the perverse incentives that existed within the system prior to the passage of ACA. Previously, many Americans were in a situation where they did not qualify for health insurance under Medicaid because they earned too much. However, they did not earn enough to purchase their own private insurance plan. Thus an incentive existed for people not to work in order to qualify for health care under Medicaid. The health care reform bill eliminates this problem by not only requiring the working poor to buy insurance, but helping them significantly with the premium (in many cases, paying for it completely). 

My latest posts can be summarized as follows: Positive rights, including the right to adequate health care, the right to a basic education, the right to food and shelter, the right of the disabled to adequate care, are essential for protecting the most vulnerable among us. Guaranteeing these rights does not mean giving up our free market system. But it does preserve our moral values and helps forge a more promising future for all Americans. As Elizabeth Warren noted, America’s most successful businesses and individuals would not be where they are where it not for our great American system with its institutions and programs. Billionaire investor Warren Buffet confirmed this notion when he pointed out recently that many of America’s super-wealthy recognize that this country has given them a unique opportunity. We should vigorously defend and improve America’s key institutions, infrastructure, and social programs if we desire continued success.