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Health insurance transitions and use of fringe banks: Evidence from the Affordable Care Act

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  • Anne Fitzpatrick
  • Katie Fitzpatrick

Abstract

The Affordable Care Act (ACA) increased health insurance enrollment, potentially improving financial security. We test whether this insurance increase relates to changes in use of “fringe banks” (e.g., payday lenders, check cashers, and pawn shops). Using the panel structure of the Current Population Survey (CPS), we link 5 years of a Federal Deposit Insurance Corporation (FDIC)‐sponsored supplement to March CPS data. We find declines in fringe bank use, specifically fringe credit (e.g., pawn loans), associated with new insurance coverage with larger declines for households affected by the ACA's Medicaid expansion. These results suggest that health insurance reduces reliance on these controversial financial products.

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  • Anne Fitzpatrick & Katie Fitzpatrick, 2021. "Health insurance transitions and use of fringe banks: Evidence from the Affordable Care Act," Contemporary Economic Policy, Western Economic Association International, vol. 39(3), pages 557-572, July.
    • Handle: RePEc:bla:coecpo:v:39:y:2021:i:3:p:557-572
    DOI: 10.1111/coep.12479
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    References listed on IDEAS

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    Cited by:

    1. Lindsey Rose Bullinger, 2021. "Child Support and the Affordable Care Act's Medicaid Expansions," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 40(1), pages 42-77, January.

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