The Effect of Health Insurance on Home Payment Delinquency: Evidence from ACA Marketplace Subsidies

61 Pages Posted: 23 Feb 2017 Last revised: 21 Apr 2018

Emily Gallagher

University of Colorado at Boulder - Department of Finance; Federal Reserve Banks - Federal Reserve Bank of St. Louis; Washington University in St. Louis - John M. Olin Business School

Radhakrishnan Gopalan

Washington University in St. Louis - John M. Olin Business School

Michal Grinstein-Weiss

University of North Carolina (UNC) at Chapel Hill; Washington University in St. Louis

Date Written: April 11, 2018

Abstract

We use administrative tax data and survey responses to quantify the effect of health insurance on rent and mortgage delinquency. We employ a regression discontinuity (RD) design, exploiting the income threshold for receiving Marketplace subsidies in states that did not expand Medicaid under the Affordable Care Act. Eligibility for subsidies is associated with a roughly 26 percent decline in the delinquency rate and reduced exposure to out-of-pocket medical expenditure risk. IV results indicate that this relationship is likely causal. We show that, under plausible assumptions, the social benefits implied by our RD estimates, in terms of fewer evictions and foreclosures, are substantial relative to the transfer value of the subsidies.

Keywords: Regression discontinuity, Affordable Care Act, Obamacare, exchanges, bankruptcy, LMI households, Medicaid, coverage gap

Suggested Citation

Gallagher, Emily and Gopalan, Radhakrishnan and Grinstein-Weiss, Michal, The Effect of Health Insurance on Home Payment Delinquency: Evidence from ACA Marketplace Subsidies (April 11, 2018). Available at SSRN: https://ssrn.com/abstract=2922260 or http://dx.doi.org/10.2139/ssrn.2922260

Emily Gallagher (Contact Author)

University of Colorado at Boulder - Department of Finance ( email )

Campus Box 419
Boulder, CO 80309
United States

Federal Reserve Banks - Federal Reserve Bank of St. Louis ( email )

411 Locust St
Saint Louis, MO 63011
United States

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States

Radhakrishnan Gopalan

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States

Michal Grinstein-Weiss

University of North Carolina (UNC) at Chapel Hill ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

Washington University in St. Louis ( email )

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

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