The effect of ACA Marketplace subsidies on residential mortgage applications and originations

Fanyu Liu () and Kerui Geng ()
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Fanyu Liu: Tulane University
Kerui Geng: Tulane University

No 2406, Working Papers from Tulane University, Department of Economics

Abstract: This paper examines the impact of health insurance subsidies on the financial investments of low-income households. Specifically, we estimate the impact of Affordable Care Act (ACA) health insurance exchange (Marketplace) subsidies on mortgage applications and originations using comprehensive mortgage application record data. We use a difference-in-differences approach that exploits variation in county health insurance coverage rates at the time of reform. We find that the subsidies increased the amount of residential mortgages applied for by low-income households and the amount actually originated by financial institutions. To explore potential mechanisms, we use survey data and find that these subsidies increased low-income households' health insurance coverage rates, reduced large-scale household medical expenditures and mortgage delinquency rates. These findings highlight an aspect of the broader economic impact of the ACA health insurance subsidies beyond increasing coverage rates among the targeted group.

Keywords: Residential Mortgage; ACA Marketplace; Health Insurance (search for similar items in EconPapers)
JEL-codes: G21 I13 I18 R31 (search for similar items in EconPapers)
Date: 2024-03
New Economics Papers: this item is included in nep-hea and nep-ure
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http://repec.tulane.edu/RePEc/pdf/tul2406.pdf First Version, March 2024 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:tul:wpaper:2406

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