Medicaid and Financial Health

Kenneth Brevoort, Daniel Grodzicki and Martin Hackmann

No 24002, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper investigates the effects of the Medicaid expansion provision of the Affordable Care Act (ACA) on households' financial health. Our findings indicate that, in addition to reducing the incidence of unpaid medical bills, the reform provided substantial indirect financial benefits to households. Using a nationally representative panel of 5 million credit records, we find that the expansion reduced unpaid medical bills sent to collection by $3.4 billion in its first two years, prevented new delinquencies, and improved credit scores. Using data on credit offers and pricing, we document that improvements in households' financial health led to better terms for available credit valued at $520 million per year. We calculate that the financial benefits of Medicaid double when considering these indirect benefits in addition to the direct reduction in out-of-pocket expenditures.

JEL-codes: D14 H51 I13 (search for similar items in EconPapers)
Date: 2017-11
New Economics Papers: this item is included in nep-hea, nep-ias and nep-pbe
Note: EH PE
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Citations: View citations in EconPapers (17)

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