Blog Post

Affordable Care Act Will Improve Incomes of Americans in Bottom Fifth of Income Distribution

January 28, 2014, Fred Dews

The Affordable Care Act (aka "Obamacare") was designed to expand health insurance coverage and hold down the cost of insurance, but it will also change incomes of many Americans, according to initial projections of Brookings Senior Fellows Henry Aaron and Gary Burtless. In their new, preliminary paper "Potential Effects of the Affordable Care Act on Income Inequality," Aaron and Burtless find sizeable income gains in the bottom quarter of the income distribution offset by small losses spread across higher income groups. Their estimates are highly sensitive to the definition of income. They discussed their paper in a recent event, joined by three other economists in a panel discussion.