Using a novel data set from a major credit bureau, we examine the early effects of the Affordable Care Act Medicaid expansions on personal finance. We analyze less common events such as personal bankruptcy, and more common occurrences such as medical collection balances, and change in credit scores. We estimate triple-difference models that compare individual outcomes across counties that expanded Medicaid versus counties that did not, and across expansion counties that had more uninsured residents versus those with fewer. Results demonstrate financial improvements in states that expanded their Medicaid programs as measured by improved credit scores, reduced balances past due as a percent of total debt, reduced probability of a medical collection balance of $1,000 or more, reduced probability of having one or more recent medical bills go to collections, reduction in the probability of experiencing a new derogatory balance of any type, reduced probability of incurring a new derogatory balance equal to $1,000 or more, and a reduction in the probability of a new bankruptcy filing.
Millions of uninsured people use health care services every year. We estimated providers' uncompensated care costs in 2013 to be between $74.9 billion and $84.9 billion. We calculated that in the aggregate, at least 65 percent of providers' uncompensated care costs were offset by government payments designed to cover the costs. Medicaid and Medicare were the largest sources of such government payments, providing $13.5 billion and $8.0 billion, respectively. Anticipating fewer uninsured people and lower levels of uncompensated care, the Affordable Care Act reduces certain Medicare and Medicaid payments. Such cuts in government funding of uncompensated care could pose challenges to some providers, particularly in states that have not adopted the Medicaid expansion or where implementation of health care reform is proceeding slowly.
We study the effect of Medicare on financial strain, measured by annual changes in medical debt in collections, using credit bureau data. We exploit the program's eligibility age at 65 and compare the experiences of those just under and over age 65 using a regression discontinuity design. We find that during our baseline study period Medicare reduced the annual probability of large medical collections, above $1,000, by 0.31 percentage points, a 19 percent reduction relative to the probability for those aged 60-64, and reduced new medical collections by approximately $380 at the 99th percentile, a 23 percent decrease. We hypothesize that Medicare mainly decreases medical collections among those who transition from uninsured to Medicare. Under that hypothesis we estimate a "treatment on the treated" average reduction of about $250 in new medical collections. We find support for our hypothesis by comparing discontinuities for those in zip codes with different uninsured rates pre-age 65, and comparing discontinuities before and after implementation of the main health insurance provisions of the Affordable Care Act. Our findings complement recent work on the role of Medicare in reducing risk of out-of-pocket medical expenditures and of health insurance in reducing medical collections.
This study is the first to offer a detailed look at the burden of medical out-of-pocket spending, defined as total family medical out-of-pocket spending as a proportion of income, for each state. It further investigates which states have greater shares of individuals with high burden levels and no Medicaid coverage but would be Medicaid eligible under the 2014 rules of the Affordable Care Act should their state choose to participate in the expansion. This work suggests which states have the largest populations likely to benefit, in terms of lowering medical spending burden, from participating in the 2014 adult Medicaid expansions.
Well-designed interventions that achieve improvements in lifestyle-related risk factors could result in sufficient savings in the short and medium term to substantially offset intervention costs.
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