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The Effect of the Patient Protection and Affordable Care Act Medicaid Expansions on Financial Wellbeing

Listed author(s):
  • Hu, Luojia

    ()

    (Federal Reserve Bank of Chicago)

  • Kaestner, Robert

    (University of Illinois at Chicago)

  • Mazumder, Bhashkar

    (Federal Reserve Bank of Chicago)

  • Miller, Sarah

    (University of Michigan)

  • Wong, Ashley

We examine the effect of the Medicaid expansions under the 2010 Patient Protection and Affordable Care Act (ACA) on consumer, financial outcomes using data from a major credit reporting agency for a large, national sample of adults. We employ the synthetic control method to compare individuals living in states that expanded Medicaid to those that did not. We find that the Medicaid expansions significantly reduced the number of unpaid bills and the amount of debt sent to third-party collection agencies among those residing in zip codes with the highest share of low-income, uninsured individuals. Our estimates imply a reduction in collection balances of between $600 to $1,000 among those who gain Medicaid coverage due to the ACA. Our findings suggest that the ACA Medicaid expansions had important financial impacts beyond health care use.

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Paper provided by Federal Reserve Bank of Chicago in its series Working Paper Series with number WP-2016-10.

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Length: 62 pages
Date of creation: 21 Sep 2016
Handle: RePEc:fip:fedhwp:wp-2016-10
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  1. Silvia Helena Barcellos & Mireille Jacobson, 2015. "The Effects of Medicare on Medical Expenditure Risk and Financial Strain," American Economic Journal: Economic Policy, American Economic Association, vol. 7(4), pages 41-70, November.
  2. Sumit Agarwal & Paige Marta Skiba & Jeremy Tobacman, 2009. "Payday Loans and Credit Cards: New Liquidity and Credit Scoring Puzzles?," American Economic Review, American Economic Association, vol. 99(2), pages 412-417, May.
  3. Jonathan Gruber & Aaron Yelowitz, 1999. "Public Health Insurance and Private Savings," Journal of Political Economy, University of Chicago Press, vol. 107(6), pages 1249-1274, December.
  4. Gross, Tal & Notowidigdo, Matthew J., 2011. "Health insurance and the consumer bankruptcy decision: Evidence from expansions of Medicaid," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 767-778, August.
  5. Amy Finkelstein & Nathaniel Hendren & Erzo F.P. Luttmer, 2015. "The Value of Medicaid: Interpreting Results from the Oregon Health Insurance Experiment," NBER Working Papers 21308, National Bureau of Economic Research, Inc.
  6. Silvia H. Barcellos & Mireille Jacobson, 2014. "The Effects of Medicare on Medical Expenditure Risk and Financial Strain," NBER Working Papers 19954, National Bureau of Economic Research, Inc.
  7. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
  8. Kaestner, Robert & Kaushal, Neeraj & Van Ryzin, Gregg, 2003. "Migration consequences of welfare reform," Journal of Urban Economics, Elsevier, vol. 53(3), pages 357-376, May.
  9. Craig Garthwaite & Tal Gross & Matthew J. Notowidigdo, 2015. "Hospitals as Insurers of Last Resort," NBER Working Papers 21290, National Bureau of Economic Research, Inc.
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