Health Care Reform, Health Insurance Benefits and Poverty Measurement: The Impact of Health Care Reform on Poverty in Massachusetts

Sanders Korenman, CUNY Institute for Demographic Research (CIDR)
Dahlia Remler, Baruch College, City University of New York (CUNY)

Changes to the US health care system resulting from the ACA and Medicare Advantage plans make it possible to calculate a valid health-inclusive poverty measure (HIPM). Key are reforms that break the link between insurance premiums and health status. This enables the estimation of “needs” for basic health insurance without detailed information on health and health insurance markets. Building on the Census Bureau’s Supplemental Poverty Measure (SPM), we construct a HIPM that includes health insurance as a basic need and health insurance benefits as resources available to meet those needs. We use the HIPM to illustrate impacts of health benefits on poverty rates and poverty gaps for the under-65 population in 2010 Massachusetts, under reforms similar to ACA. Results suggest that public health insurance benefits reduced the HIPM poverty rate by 1/3; among cash-poor families who purchased insurance, Massachusetts premium subsidies alone reduced the HIPM poverty rate 9.4 percentage points.