Header Ads

Health insurance or house payments? Obamacare means many poor Americans are able to pay their rent and mortgages on time by reducing health care costs, study shows (2 Pics)

The Affordable Care Act – better known as Obamacare – helps protect poor Americans from falling behind on rent or mortgage payments, according to a new study.
Researchers from University of Colorado at Boulder and Washington University in St. Louis analyzed three years of tax data and survey responses from 15,000 people to test the effect of having health insurance among low-income Americans.
They found that low-income people who purchased health care through an Obamacare marketplace were 25 percent less likely than poor Americans without health insurance to miss housing payments.
'When people think of health insurance they're thinking about its effect on people's health, but health insurance is primarily found to be important for their financial situation,' said lead author Emily Gallagher, in an interview with DailyMail.com.
This map illustrates the rate of Americans without health insurance in each state, with darker red shades indicating a higher rate of uninsured, according to data from the U.S. Census bureau
Researchers said that unexpected health care costs – or 'shocks' – can lead to low-income households being unable to pay their rent or mortgage, adding that they found a causal link between health coverage and housing stability.
People who bought health coverage through Obamacare also ultimately spent less money out of pocket on health care costs – saving them an average of $1,054 per household each year, according to the study, which is pending publication in the Journal of Public Economics.
'Having health insurance means you have less money being spent on health care and less medical debt,' Gallagher said.
The resulting decrease in foreclosures and evictions is also good news for the greater housing market, local communities and governments, researchers found.
A single foreclosure can reduce a neighborhood's surrounding home prices by anywhere from 1 percent to 8.7 percent, according to a separate 2014 study. And when housing values drop, local governments lose property tax revenues.
By helping more Americans avoid those economic pitfalls, the ACA has offered some insulation to housing markets that are still recovering from the 2008 recession.
'One thing we learned from the financial crisis and the foreclosure bubble that occurred in the U.S. was that widespread foreclosures have an adverse impact on adjacent properties,' said Jonathan Miller, president and CEO of Miller Samuel Inc., a New York City-based real estate and appraisal firm.
'If a neighborhood or a community has significant exposure to foreclosures, a couple of things happen: it depresses prices (and) it makes it harder to get a loan,' Miller told DailyMail.com. 'Financial institutions are more wary of markets that have heavy foreclosure exposure and it can take a long time to undo that concern.'
That has been evidenced in Southern Florida housing markets, where prices are up but financial institutions remain so worried about lending that half of home purchases in that region are all cash, Miller said.
The Affordable Care Act, which resulted in an additional 20 million people gaining health coverage, created a requirement (the so-called 'individual mandate') that all Americans must have health insurance. 
Trump eliminated the individual mandate in April, which had forced Americans who don't get employer-sponsored health coverage to purchase health insurance through state marketplaces – often on a sliding scale based on income – or pay a penalty. 
The insurance industry has said that the market will go into a death spiral when Trump's change takes effect in 2019, because young, healthy people are expected to stop paying for health insurance without the penalty. As a result, primarily sick and old people will remain in the market, driving up health costs across the board.
Obamacare also gave states the option to expand Medicaid to more low-income Americans.
This map illustrates which states expanded Medicaid to include more low-income people immediately under the Affordable Care Act in 2014, versus states that later expanded their programs and those that have opted against doing so
Nearly half (22 states) initially chose not to expand Medicaid. Since then, an additional 9 have expanded the health care program for low-income Americans.
As a result, many Americans fell into a 'donut hole' in which they earned too much to qualify for Medicaid but too little to qualify for a subsidy through those state marketplaces.
In those states, the decline in home payment delinquency ranged from 2.4-7.8 percentage points, according to the study. And the effect was more pronounced among people who expected to seek medical treatment.  
The study comes as a federal judge in Texas decided to strike down the entire Affordable Care Act on the grounds that the individual mandate is unconstitutional and that the rest of the law won't hold up without that provision.
The law isn't gone, for now, but it's future remains uncertain. Lawmakers and legal experts from both parties have said they expect the ruling will be overturned on appeal.  
Senate Democratic Leader Chuck Schumer has pledged that his party will fight 'tooth and nail' against the ruling. 
Earlier this month, Donald Trump pushed the nation's high court to take up the case, saying he wants to work with Democrats to pass a new law that would replace the one that Republicans attempted to gut last year with a tax overhaul bill.
'The DEDUCTIBLE which comes with ObamaCare is so high that it is practically not even useable! Hurts families badly. We have a chance, working with the Democrats, to deliver great HealthCare!' the president said in a tweet. 'A confirming Supreme Court Decision will lead to GREAT HealthCare results for Americans!'

No comments