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.

Universal Health Care Benefits Everyone, Eliminates Free Riders

Positive rights should not just be viewed through the lens of entitlement. Positive rights are similar to public goods in that they provide positive benefits to society as a whole (in economics, this phenomenon is called a positive externality). This is especially true with health care. If everyone has access to good health care, the chance of serious epidemic outbreaks declines. More people are thus eligible to work. American productivity increases because workers require fewer sick days. Healthier people spend more money on other things aside from health care, stimulating the economy. (For good explanations on health care as a public good, click here and here.)

A Minimum Living Standard in the World’s Wealthiest Country

In the last post, I illustrated how the positive right to an education is essential to a modern economy. Most Americans do not question the right to a public education, perhaps because it has been a fact of American life for over a century. Other positive rights adopted to some extent by American society, which are unfortunately more controversial, include the right of the disabled to a dignified existence, the right to food and shelter, and the right to life-saving emergency care. Most recently, through the 2010 Affordable Care Act, we adopted in principle the right to adequate comprehensive health care.

The Right to a Public Education

In my last post, I mentioned certain “positive rights” that Americans have come to assume are part of the social contract. Public education is perhaps the least controversial example of a positive right in America. As a society, we generally believe that every child has a right to a high school education, regardless of his or her parents’ income level. However, with the recent upswing of right-wing extremism, some (generally Ron Paul supporters) question the right to a public education because it requires redistribution of wealth throughout a community. Many extreme libertarians view government taxation for any kind of social program, including public education, as theft, and advocate a system of government where any redistributive program do not exist.

Defending a Century of American Progress

Massachusetts Senate candidate Elizabeth Warren, in an oft-seen video clip, describes how a thriving industrialized economy is dependent on government taxation and redistribution for the creation of key institutions, infrastructure, and social programs: She notes, “there is nobody in this country who got rich on his own.”

She mentions factory owners who “move [their] goods to market on the roads the rest of us paid for,” and “hired workers the rest of us paid to educate.” She adds that police and fire services, that “the rest of us paid for” kept them safe and prevented them from having to hire their own security and fire defense forces. She ends by saying, “Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”