Health Insurance and Young Adult Financial Distress

Nathan Blascak and Vyacheslav Mikhed

No 19-54, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: We study the financial effects of health insurance for young adults using the Affordable Care Act’s dependent coverage mandate as a source of exogenous variation. Using nationally repre-sentative, anonymized credit report and publicly available survey data on medical expenditures, we exploit the mandate’s implementation in 2010 and its automatic disenrollment mechanism at age 26. Our estimates show that increasing access to health insurance lowered young adults’ out-of-pocket medical expenditures, debt in third-party collections, and the probability of per-sonal bankruptcy. However, most improvements in financial outcomes are transitory, as they diminish after an individual ages out of the mandate at age 26.

Keywords: health insurance; consumer credit; financial outcomes; Affordable Care Act (ACA) (search for similar items in EconPapers)
JEL-codes: D14 I13 I18 (search for similar items in EconPapers)
Pages: 39
Date: 2022-08-22
New Economics Papers: this item is included in nep-hea and nep-ias
Note: originally titled: Financial Consequences of Health Insurance: Evidence from the ACA’s Dependent Coverage Mandate on 2019-12-17. REVISED in August 2022 under new title.
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Journal Article: Health Insurance and Young Adult Financial Distress (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedpwp:86687

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DOI: 10.21799/frbp.wp.2019.54

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