The Effects of Medical Debt Relief: Evidence from Two Randomized Experiments

Raymond Kluender, Neale Mahoney, Francis Wong and Wesley Yin

No 11074, CESifo Working Paper Series from CESifo

Abstract: Two in five Americans have medical debt, nearly half of whom owe at least $2,500. Concerned by this burden, governments and private donors have undertaken large, high-profile efforts to relieve medical debt. We partnered with RIP Medical Debt to conduct two randomized experiments that relieved medical debt with a face value of $169 million for 83,401 people between 2018 and 2020. We track outcomes using credit reports, collections account data, and a multimodal survey. There are three sets of results. First, we find no impact of debt relief on credit access, utilization, and financial distress on average. Second, we estimate that debt relief causes a moderate but statistically significant reduction in payment of existing medical bills. Third, we find no effect of medical debt relief on mental health on average, with detrimental effects for some groups in pre-registered heterogeneity analysis.

Keywords: debt relief; medical debt; health care; mental health; access to credit (search for similar items in EconPapers)
JEL-codes: G51 I10 I18 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-exp and nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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