Obamacare as Redistribution

I don’t think anyone thinks Obamacare was not about a whole bunch of issues simultaneously.

And I don’t think anyone has any doubts that it was about helping the poorest, who have the most trouble affording healthcare, at the expense of the rich.

OK. So Obamacare is partly about income redistribution. Fair enough.

The thing I don’t think many people realize is that many assume that they are in the income category that benefits. For most people, this just isn’t true.

Check out this chart:

That’s not exactly redistributing from the 1% to the 99%.

In terms of deciles, the middle class is typically defined as the 3rd through the 8th. For perspective, most business school professors are in the 9th decile, and I don’t think casual observers would regard us as “rich”. But, the 9th and 10th deciles are what we more-or-less officially classify as rich.

There are a number of sources to figure out where you sit in those deciles, but a particularly fun and easy tool to assess your income percentile is available at Political Calculations. It shows that in 2014 the cutoff between the 2nd and 3rd deciles was at about $22K in annual income for a household (I chose household rather than individual because most health insurance is sold to cover households).

In sum, the redistributive component of Obamacare is from the rich and the middle class to the poor.

The source for this is a paper from Aaron and Burtless at The Brookings Institute. Here’s an executive summary. Neither of those guys, or Brookings, is regarded as supporting Republicans, conservatives, or libertarians. So this is very much Democratically-sympathetic economists telling us that it’s not about helping the middle class.