WASHINGTON (AP) — Maybe the health care law was about wealth transfer, after all.
New research shows that the Affordable Care Act will significantly boost the economic fortunes of those in the bottom one-fifth of the income ladder while slightly reducing average incomes on the rungs above.
Economists at the nonpartisan Brookings Institution, a Washington public policy center, found an average increase of about 6 percent in the incomes of the poorest 20 percent of the United States, meaning those making below approximately $20,600 a year.
The study used a broad definition of income that counts the value of health insurance, which is not normally measured by Census Bureau income statistics.
Changing the distribution of incomes was not a stated objective of the health care law, co-authors Henry Aaron and Gary Burtless wrote. "Nonetheless, the ACA may do more to change the income distribution than any other recently enacted law."
"This is certainly a very big deal for the income distribution of the United States," Burtless said. "If you are raising the incomes of the people in the bottom fifth by 6 percent, then we are talking about a big change."
A leading economic adviser to Republicans said he agrees with the broad findings.
"This was always portrayed as a health reform, not a big redistribution policy, but it turns out they are the same thing," said Douglas Holtz-Eakin, president of the American Action Forum, a center-right public policy institute.
That could mean the health care law may one day be seen as President Barack Obama's biggest legacy to the poor, not just the uninsured. The two groups often overlap, but not always.
Major programs such as Social Security, Medicare and Medicaid redistribute income in various ways: from workers to retirees and disabled people; from wealthier people to those of more modest means; and from younger people to older ones.
Americans describe such programs as "social insurance," or the "safety net."
Burtless said the Brookings researchers used a large government survey of more than 60,000 people. They developed a measure of income that included not only categories such as wages, rents and investments, but also the value of health insurance benefits, whether provided by an employer or obtained through a government program.