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Hospital Billing Regulations and Financial Well-Being: Evidence from California’s Fair Pricing Law

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Abstract

We examine the financial consequences of the 2007 California Fair Pricing Law, which places a price ceiling on hospital bills for financially vulnerable individuals. Exploiting cross-sectional variation in exposure to the law, we estimate its impact on individual financial distress. We find that the law reduces the likelihood of incurring non-medical debt in collections by 19.8 percent and the number of non-medical collections by 39 percent for an individual living in a county with average exposure in California. In addition, we find suggestive evidence that the number of delinquent accounts decreased for exposed individuals. Our results suggest hospital billing regulations can improve targeted individuals’ financial outcomes.

Suggested Citation

  • Yaa Akosa Antwi & Marion Aouad & Nathan Blascak, 2025. "Hospital Billing Regulations and Financial Well-Being: Evidence from California’s Fair Pricing Law," Working Papers 25-39, Federal Reserve Bank of Philadelphia.
    • Handle: RePEc:fip:fedpwp:102195
    DOI: 10.21799/frbp.wp.2025.39
    Note: Supersedes Working Paper 23-20 – I've Got 99 Problems But a Bill Ain't One: Hospital Billing Caps and Financial Distress in California
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    File URL: https://www.philadelphiafed.org/-/media/FRBP/Assets/working-papers/2025/wp25-39.pdf
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    JEL classification:

    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare

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