Obamacare increases incomes of poorest, study finds

2:37 PM, Jan 27, 2014   |    comments
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WASHINGTON (USA TODAY) -- The Affordable Care Act will "significantly" increase the incomes of Americans who fall in the bottom one-fifth of the income levels, while slightly decreasing - by .8% - the incomes of senior citizens, a new study finds.

Those in the bottom one-fifth will see income measurements rise 6%; those in the bottom one-tenth will see an increase of more than 7%, according to researchers at the Brookings Institution, a non-partisan think tank.

The law also increases incomes for people ages 25 to 64 in the poorest 20% by 9%, found authors Henry Aaron and Gary Burtless, both Brookings fellows. They looked at factors that are not typically included in income estimations, such as how much employers contribute for health insurance, and how much the government pays for Medicare or Medicaid.

"Most families will be unaffected by reform," Aaron and Burtless wrote. "Their insurance arrangements will not change, and they are not expected to pay higher taxes or premiums to finance reform or their own insurance."

In general, the law pays for increased health coverage for poorer Americans, which includes expanded Medicaid and subsidies to help pay for insurance, but raises taxes on higher-income Americans.

The authors noted that people with high incomes will see a "notable share" of income losses because those who make more than $200,000 a year will pay a .9% Medicare tax and a 3.8% Medicare tax on unearned income.

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