The Affordable Care Act, President Barack Barack Obama’s signature health law, is already boosting household income and spending.
The Commerce Department reported Monday that consumer spending rose a better-than-expected 0.4% and personal incomes climbed 0.3% in January. The new health-care law accounted for a big chunk of the increase on both fronts.
On the incomes side, the law’s expanded coverage boosted Medicaid benefits by an estimated $19.2 billion, according to Commerce’s Bureau of Economic Analysis. The ACA also offered several refundable tax credits, including health insurance premium subsidies, which added up to $14.7 billion.
Taken together, the Obamacare provisions are responsible for about three-quarters of January’s overall rise in Americans’ incomes.
Of course, what the government gives, the government can take away. Case in point: The late-December expiration of a federal program that provided extended aid to unemployed Americans reduced benefit payments $16.7 billion.
Excluding special factors, the Commerce Department said personal income increased a more moderate $23.7 billion, or 0.2%, in January, after falling $15.1 billion, or 0.1%, in December. So it hasn’t been a very good winter for American households.
Also worth noting: The payments are categorized as ‘transfer receipts.” That is, the money is transferred from one household to another via government taxes.
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