Medicare and the Geography of Financial Health

Abstract

We use a five percent sample of Americans' credit bureau data to study the effects of public health insurance on the geography of consumer financial health. Exploiting the (nearly) universal eligibility for Medicare at age 65, we find a 30 percent reduction in debt collections with limited effects on other financial outcomes. Medicare reduces the geographic variation in collections by two-thirds at age 65, and halves the geographic correlation between collections and demographics like race and education. Areas that experienced larger gains in financial health at age 65 had higher shares of black residents, people with disabilities, and for-profit hospitals.

Health Insurance and Young Adult Financial Distress

“…We also find that YAs living in counties with high uninsured rates prior to the passage of the mandate experienced the largest declines in financial distress. This result is in line with recent research showing that place-based factors play a role in the incidence of financial distress (Goldsmith-Pinkham et al, 2021;Keys et al, 2023).…”

The Liquidity Sensitivity of Healthcare Consumption: Evidence from Social Security Payments

“…A related issue is the "access motive" for health insurance: the idea that health insurance not only protects against financial risks but also makes otherwise-unaffordable healthcare accessible (de Meza, 1983;Nyman, 1999). Finally, our paper contributes to a growing literature on health insurance and consumer financial outcomes such as bankruptcy (Mahoney, 2015;Dobkin et al, 2018) and debt (Barcellos and Jacobson, 2015;Mazumder and Miller, 2016;Hu et al, 2018;Goldsmith-Pinkham et al, 2020), as well as recent work on demand for health insurance among low-income households (Finkelstein et al, 2019). These studies grapple with how the traditional economic model of insurance ought to incorporate new findings from the consumption literature and behavioral economics.…”

Schedule Unpredictability and High-Cost Debt: The Case of Service Workers

“…In fact, an incipient literature finds that state welfare generosity shapes the landscape of the alternative financial services industry in the United States. For instance, individuals living in areas where Medicaid was expanded or with generous unemployment benefits are less reliant on high-cost debt (Allen et al 2017;Fitzpatrick and Fitzpatrick 2020;Goldsmith-Pinkham, Pinkovskiy, and Wallace 2020;Wiedemann 2021). After establishing the relative magnitude of the association between problematic debt and dimensions of time or money among low-wage workers who experience high levels of temporal precarity, our study sheds light on the role of public or private programs that offer cash assistance in protecting low-wage workers with unstable schedules against problematic debt.…”