"Three early signs of what Obamacare means for consumers"

[applegrove]

Three early signs of what Obamacare means for consumers

By Jia Lynn Yang at the Washington Post

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/03/04/three-early-signs-of-what-obamacare-means-for-consumers/

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1) The Affordable Care Act represents a major income boost for many Americans.

The law entails a massive expansion in government social benefits, and the numbers from January bear this out. The Medicaid expansion was the biggest factor in driving up personal income in January, which rose 0.3 percent from the month before. By comparison, overall income was flat in December. The Commerce Department estimates that the Medicaid expansion alone added $19.2 billion to income in January

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On top of the Medicaid expansion, refundable tax credits for families buying insurance through the health exchanges accounted for the bulk of another $14.7 billion in added government social benefits, according to the data.

All of this helped offset the drop in income from the expiration of long-term unemployment benefits, which cut income by $17 billion, according to government estimates.

2) The law also drives up overall spending.

On the spending side, the effect of Obamacare was also significant in January. It was the biggest reason behind a 0.4 percent jump in consumer spending, more than many economists had expected. You can see both the jump in income and health services consumption in the chart produced by Goldman Sachs below in a new report:




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