A time-honored way to freak out the middle class is to call a government program a plan to “redistribute” income to the less fortunate. Obamacare’s foes never miss the chance, writes syndicated columnist Froma Harrop.
Few truly appreciate the enormous economic benefits the Affordable Care Act will deliver to the American people over time, the middle class included. But you’d expect New York’s seasoned Democratic U.S. senator, Charles Schumer, to “get it” rather than belittle the 2010 federal health-care law as a political inconvenience for his party.
Amazingly, Schumer recently complained that reforms affected only “a small percentage of the electorate.” Has he any idea what’s going on — I mean beyond the calculations of the most recent election, the planning for the next?
A time-honored way to freak out the middle class is to call a government program a plan to “redistribute” income to the less fortunate. Obamacare’s foes never miss the chance. Schumer plays into that narrative.
Anytime you help people obtain benefits they couldn’t afford before, money is going to move. There is redistribution all around us, in Social Security, in Medicare, in farm subsidies, in the tax code.
George W. Bush and a Republican Congress pushed through a Medicare drug benefit for which the poor paid almost nothing and richer beneficiaries paid more. And because these modest sums funded little of the program, almost the entire cost was shifted to the taxpayers. The Medicare drug benefit was redistribution big-time.
There is indeed some redistribution in Obamacare. When you include the value of health coverage, the reforms boost income in the bottom fifth of earners by at least 6 percent, according to the Brookings Institution. This number would have been higher had 23 states not rejected the law’s offer to cover more of the working poor under Medicaid.
Whose income is being sent to the less wealthy? Those in the top three-quarters, Brookings says, though their income loss is proportionally quite small.
Bear in mind that government subsidies are available to folks earning up to 400 percent of the federal poverty level. That means the help goes well into the middle class.
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The soaring cost of medical coverage deserves much blame for today’s stagnant wages as employers take it out of workers’ paychecks. The Affordable Care Act is already credited with starting to curb the rise in health-care spending. It stands to reason that companies will eventually pass some of the savings on to their employees.
The health reforms redistribute a lot more than money. They expand peace of mind and freedom to start a business.
Knowing that an insurer can’t drop your family when a member gets ill is priceless. Under the old regime, even the well-to-do couldn’t get coverage if someone had a pre-existing condition.
And there’s the redistribution of opportunity. Many Americans not cushioned by wealth nevertheless dream of founding their own company. They continue working for others rather than lose their family’s health benefits. We call this “job lock.” Offer them dependable, affordable health coverage and many will take off, leaving job openings for newcomers.
Meanwhile, the structure of work is changing. As companies depend more on part-time labor, more workers must stitch together several part-time jobs, none offering health benefits. Many positions are now being filled by independent contractors — that is, people who work for themselves. Both groups need a way to obtain coverage at a reasonable cost.
The rich can pay for their own health care, and the destitute get it free. The assurance that a medical crisis won’t sink a family is a gift to the middle class.
So the Affordable Care Act is not some distraction in the quest for more jobs and better pay. It is more jobs and better pay. It’s an economy less burdened by a bankrupting health-care system. It is big, and even our politicians should know that.