A strange paradox has opened up in the magnificently cruel US healthcare system. The Affordable Care Act was supposed to subsidise people with modest incomes (above the federal poverty line) to purchase private health insurance. Those below the poverty line — in fact, 138% of the poverty line — were supposed to be moved onto free health insurance with Medicaid. But Medicaid is administered by the states, and quite unexpectedly many states with Republican governors have refused the Medicaid expansion, out of pure political spite, making a hash of this system: Now individuals in those states whose income is below the federal poverty line still don’t get Medicaid (unless they qualify for Medicaid under the old rules, which are much more restrictive), but they can’t get the health care subsidies because they don’t earn enough.
Ignoring the huge human suffering that is being intentionally inflicted, I find this situation fascinating, because it’s something that shouldn’t exist in the world imagined by quantitative finance. How can you have too little income to receive public assistance? After all, this isn’t about net income. They don’t have to do anything with the money. It just needs to be recorded as income. Someone can give me a cheque for $1000, in payment for “personal services”, and I can give it back to pay his bill for “financial services”. There. I’ve just gotten another $1000 in income. You’d have to put some extra organisational effort in to make sure that you don’t incur any tax obligations.
But the point is, in the world of high finance, there isn’t a category of “income”. There’s just money. And they don’t leave money on the table just because there’s not enough in one particular accounting category. But the poor don’t just lack money; they don’t have people to structure their transactions in beneficial ways.