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I've Got 99 Problems But a Bill Ain't One: Hospital Billing Caps and Financial Distress in California

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Abstract

We examine the financial consequences of the 2007 California Fair Pricing Law (FPL), a law that places a price ceiling on hospital bills for uninsured and financially vulnerable individuals. Using difference-in difference-in-differences models, we exploit cross-sectional variation in exposure to the law to estimate the causal effects of the FPL on different measures of financial distress. We find that the law reduces the medical and non-medical debt burden of individuals targeted by the law, with the likelihood of incurring non-medical debt in collections declining by 14.5 percent and the number of non-medical collections declining by 31 percent. The law also reduces the probability of having medical and non-medical debt balances between $1 and $1,000 in collections by 16.5 percent and 40 percent, respectively. Our results suggest that hospital billing regulations have direct and indirect effects on the personal financial outcomes of uninsured and financially vulnerable individuals.

Suggested Citation

  • Yaa Akosa Antwi & Marion Aouad & Nathan Blascak, 2023. "I've Got 99 Problems But a Bill Ain't One: Hospital Billing Caps and Financial Distress in California," Working Papers 23-20, Federal Reserve Bank of Philadelphia.
    • Handle: RePEc:fip:fedpwp:96847
    DOI: 10.21799/frbp.wp.2023.20
    Note: SUPERCEDED DEC 2025 BY WP 25-39 - Hospital Billing Regulations and Financial Well-Being: Evidence from California’s Fair Pricing Law
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    JEL classification:

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

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