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

85 Pages Posted: 25 Oct 2016 Last revised: 6 Sep 2017

See all articles by Luojia Hu

Luojia Hu

Federal Reserve Bank of Chicago

Robert Kaestner

University of Chicago; National Bureau of Economic Research (NBER)

Bhashkar Mazumder

Federal Reserve Bank of Chicago

Sarah Miller

University of Michigan at Ann Arbor

Ashley Wong

Federal Reserve Bank of Chicago

Date Written: 2016-09-21

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.

Keywords: Health insurance, consumer finance, low income, Medicaid, public policy, Affordable Care Act (ACA)

JEL Classification: H42, I12, I18

Suggested Citation

Hu, Luojia and Kaestner, Robert and Mazumder, Bhashkar and Miller, Sarah and Wong, Ashley, The Effect of the Patient Protection and Affordable Care Act Medicaid Expansions on Financial Wellbeing (2016-09-21). FRB of Chicago Working Paper No. WP-2016-10. Available at SSRN: https://ssrn.com/abstract=2857533

Luojia Hu (Contact Author)

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

Robert Kaestner

University of Chicago ( email )

1155 East 60th Street
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

365 Fifth Avenue, 5th Floor
New York, NY 10016-4309
United States

Bhashkar Mazumder

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

Sarah Miller

University of Michigan at Ann Arbor ( email )

500 S. State Street
Ann Arbor, MI 48109
United States

HOME PAGE: http://www-personal.umich.edu/~mille/

Ashley Wong

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

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