Affordable Care Act Improves Financial Security and Fights Poverty


“The Affordable Care Act is the single biggest blow against poverty since the 1960s…”

– John Bouman, President, Sargent Shriver National Center on Poverty Law

For those of you that nodded in agreement when John Bouman made that statement at the annual Center for Children and Families conference last summer, you’ll be pleased to know that a new report from the Brookings Institute reinforces his point.

While addressing income inequality wasn’t a stated goal of health reform, the Affordable Care Act “may do more to change the income distribution than any other recently enacted law”, according to the authors Henry J. Aaron and Gary Burtless. The ACA helps low-wage earners mainly by providing premium tax credits and offering states generous funding to offer Medicaid coverage to more uninsured adults.

The authors estimate that the incomes of people in the bottom one-fifth of the income distribution will increase by more than 7% due to the Affordable Care Act. (The study used a broad definition of the term “income”, which included the value of health insurance.)

Of course, those states that haven’t accepted the Medicaid funding will not lift as many of their residents out of poverty as those that embraced the new law but we are still holding out hope that they will come to their senses.

Read more about the report here.