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

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  • 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

Abstract

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.

Suggested Citation

  • Hu, Luojia & Kaestner, Robert & Mazumder, Bhashkar & Miller, Sarah & Wong, Ashley, 2016. "The Effect of the Patient Protection and Affordable Care Act Medicaid Expansions on Financial Wellbeing," Working Paper Series WP-2016-10, Federal Reserve Bank of Chicago.
  • Handle: RePEc:fip:fedhwp:wp-2016-10
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    References listed on IDEAS

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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.
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    4. 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.
    5. Craig Garthwaite & Tal Gross & Matthew J. Notowidigdo, 2015. "Hospitals as Insurers of Last Resort," NBER Working Papers 21290, National Bureau of Economic Research, Inc.
    6. 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.
    7. 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.
    8. 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.
    9. 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.
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    Cited by:

    1. Courtemanche, Charles & Marton, James & Ukert, Benjamin & Yelowitz, Aaron & Zapata, Daniela, 2017. "Early Effects of the Affordable Care Act on Health Care Access, Risky Health Behaviors, and Self-Assessed Health," IZA Discussion Papers 10649, Institute for the Study of Labor (IZA).
    2. Maclean, J. Catherine & Saloner, Brendan, 2017. "The Effect of Public Insurance Expansions on Substance Use Disorder Treatment: Evidence from the Affordable Care Act," IZA Discussion Papers 10745, Institute for the Study of Labor (IZA).
    3. Amy Finkelstein & Nathaniel Hendren & Mark Shepard, 2017. "Subsidizing Health Insurance for Low-Income Adults: Evidence from Massachusetts," NBER Working Papers 23668, National Bureau of Economic Research, Inc.
    4. Johanna Catherine Maclean & Michael F. Pesko & Steven C. Hill, 2017. "The Effect of Insurance Expansions on Smoking Cessation Medication Prescriptions: Evidence from ACA Medicaid Expansions," NBER Working Papers 23450, National Bureau of Economic Research, Inc.
    5. Rina Na & David J.G. Slusky, 2016. "Does The Aca’S Medicaid Expansion Improve Health?," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 201608, University of Kansas, Department of Economics, revised Sep 2016.
    6. Michael DiNardi, 2017. "Affordable Care Act Medicaid Expansions and the Impact on Nurses," 2017 Papers pdi509, Job Market Papers.
    7. repec:eee:socmed:v:187:y:2017:i:c:p:233-242 is not listed on IDEAS
    8. Argys, Laura & Friedson, Andrew & Pitts, M. Melinda, 2016. "Killer Debt: The Impact of Debt on Mortality," FRB Atlanta Working Paper 2016-14, Federal Reserve Bank of Atlanta.
    9. David Slusky & Donna Ginther, 2017. "Did Medicaid Expansion Reduce Medical Divorce?," NBER Working Papers 23139, National Bureau of Economic Research, Inc.
    10. Kenneth Brevoort & Daniel Grodzicki & Martin B. Hackmann, 2017. "Medicaid and Financial Health," NBER Working Papers 24002, National Bureau of Economic Research, Inc.
    11. Pinka Chatterji & Yue Li, 2016. "Early Effects of the 2010 Affordable Care Act Medicaid Expansions on Federal Disability Program Participation," NBER Working Papers 22531, National Bureau of Economic Research, Inc.
    12. Argys, Laura & Friedson, Andrew & Pitts, M. Melinda & Tello-Trillo, D. Sebastian, 2017. "Losing Public Health Insurance: TennCare Disenrollment and Personal Financial Distress," FRB Atlanta Working Paper 2017-6, Federal Reserve Bank of Atlanta, revised 01 Sep 2017.

    More about this item

    Keywords

    Health insurance; consumer finance; low income; Medicaid; public policy; Affordable Care Act (ACA);

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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