The effect of the affordable care act Medicaid expansions on financial wellbeing

Abstract

We examine the effect of the Medicaid expansions under the 2010 Patient Protection and Affordable Care Act (ACA) on consumer financial outcomes using data from a major credit reporting agency for a large, national sample of adults. We employ the synthetic control method to compare individuals living in states that expanded Medicaid to those that did not. We find that the Medicaid expansions significantly reduced the number of unpaid bills and the amount of debt sent to third-party collection agencies among those residing in zip codes with the highest share of low-income, uninsured individuals. Our estimates imply a reduction in collection balances of approximately $1,140 among those who gain Medicaid coverage due to the ACA. Our findings suggest that the ACA Medicaid expansions had important financial impacts beyond increasing health care use.

Out-of-pocket spending and financial burden among low income adults after Medicaid expansions in the United States: quasi-experimental difference-in-difference study

“…“Expansion states” were defined as states that implemented the Affordable Care Act Medicaid expansion or an equivalent program on 1 January 2014. We excluded seven states that introduced Medicaid expansion after 1 January 2014, and before 31 December 2017 (Michigan, New Hampshire, Pennsylvania, Indiana, Alaska, Montana, and Louisiana), based on previous research 17. Using this definition, 26 states (including the District of Columbia) were identified as expansion states, and 18 were considered “non-expansion states” (appendix section 1).…”

“…Evidence is limited as to whether the Medicaid expansions have improved protection from financial risk. Studies are limited because they used data from a small number of states,111213 relied on indirect measures of financial risk protection (eg, self-report of whether they were worried about the ability to pay medical bills),8914151617 or did not compare states that had expanded Medicaid with those that had not 18. Therefore, whether the Affordable Care Act Medicaid expansions were associated nationally with improved financial risk protection among low income adults remains unclear.…”

Health Insurance as an Income Stabilizer

“…Foremost, this paper joins a large body of work that uses experimental or quasiexperimental designs to relate health insurance to financial outcomes. These studies typically find that affordable health insurance access leads to substantial improvements in financial well-being, including improvements in credit scores, credit offers, and reductions in various forms of debt and delinquency (Gross and Notowidigdo, 2011;Finkelstein et al, 2012;Barcellos and Jacobson, 2015;Mazumder and Miller, 2016;Brevoort et al, 2019;Blascak and Mikhed, 2019;Hu et al, 2018). Note that two other papers have used our same data set to analyze the household financial effects of the ACA.…”

Financial Consequences of Health Insurance: Evidence from the ACA's Dependent Coverage Mandate

“…Similar to other recent studies on the financial effects of health-insurance policy changes (Argys, Friedson, Pitts, and Tello-Trillo, 2019; Brevoort, Grodzicki, Hackmann, and Koulayev, 2019; Hu, Kaestner, Mazumder, Miller, and Wong, 2018;Mazumder and Miller, 2016), 3 we use individuallevel credit and debt information on a 5 percent random sample of U.S. adults with a credit report. These data provide a unique perspective for assessing financial distress as they contain detailed longitudinal records of these individuals' financial information, allowing us to track their performance accurately over time.…”