The Affordable Care Act and Economic Opportunity
The Trump administration's recent decision to push for a complete invalidation of the Affordable Care Act, and the Medicaid expansions that accompany it, has implications for more than simply the provision of healthcare in this country. It will also impact economic opportunity. Understanding the downstream ramifications of healthcare policy is crucial to any discussion to changes in the ACA.
There is a direct link between health and one of the most cherished American values: equality of opportunity. And research shows specifically that access to Medicaid reduces infant mortality, improves children’s graduation rates, and improves health in the long term. Not surprisingly, it also increases upward economic mobility. This decision will therefore not only determine whether individuals will have access to health insurance, but also whether or not children have access to opportunity.
New research demonstrates that increasing Medicaid eligibility reduces the correlation between parent and child income at the county level. This means that Medicaid makes it less likely that the children of poor mothers will grow up to be poor adults. And when this happens, economic opportunity in that county as a whole improves. For example, today’s adults whose mothers were covered by the Medicaid expansions of the 1980s—when they were pregnant—are more likely to have climbed the economic ladder than children born in the same county to poor mothers before the expansions. This increase in upward mobility was particularly strong for children born to parents at the bottom of the income distribution.
Health insurance can therefore minimize the extent to which parents’ negative economic position is passed on to their children. Making Medicaid accessible to low-income pregnant mothers had a lasting positive effect on their children that is still felt decades later.
We also know that access to Medicaid has profound effects on student achievement, which is often thought to be a pathway of economic mobility. Increased access to Medicaid improves high school graduation rates for newly eligible students, compared to their peers in earlier years who were not eligible. And because access to Medicaid is important for educational achievement, it is important for overall economic opportunity as well.
What does this mean? Health care, particularly for low income Americans, is a social policy that promotes equality of opportunity. Like access to public education, access to health insurance is a pathway for social mobility. Limiting health care subsidies shrinks social opportunity and
perpetuates inequality, reproducing poverty across generations and undermining growth overall.
This demonstrates that the ACA is about far more than healthcare, and the impact of this decision could be felt throughout the economy.