Bankruptcy as Implicit Health Insurance
AbstractThis paper examines the implicit health insurance households receive from the ability to declare bankruptcy. Exploiting cross-state and within-state variation in asset exemption law, I show that uninsured households with greater seizable assets make higher out-of-pocket medical payments, conditional on the amount of care received. In turn, I find that households with greater wealth-at-risk are more likely to hold health insurance. The implicit insurance from bankruptcy distorts the insurance coverage decision. Using a microsimulation model, I calculate that the optimal Pigovian penalties are similar on average to the penalties under the Affordable Care Act (ACA).
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18105.
Date of creation: May 2012
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Note: HC HE LE PE
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Find related papers by JEL classification:
- H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
- I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
- K35 - Law and Economics - - Other Substantive Areas of Law - - - Personal Bankruptcy Law
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-06-05 (All new papers)
- NEP-CMP-2012-06-05 (Computational Economics)
- NEP-HEA-2012-06-05 (Health Economics)
- NEP-IAS-2012-06-05 (Insurance Economics)
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- Raj Chetty & Amy Finkelstein, 2012. "Social Insurance: Connecting Theory to Data," NBER Working Papers 18433, National Bureau of Economic Research, Inc.
- Jeffrey Clemens & Joshua D. Gottlieb, 2013. "Bargaining in the Shadow of a Giant: Medicare's Influence on Private Payment Systems," NBER Working Papers 19503, National Bureau of Economic Research, Inc.
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