The Effect of Health Insurance on Home Payment Delinquency: Evidence from ACA Marketplace Subsidies
66 Pages Posted: 23 Feb 2017 Last revised: 11 Oct 2017
Date Written: October 5, 2017
We use administrative income tax data coupled with survey responses from roughly five thousand households living near the federal poverty line (FPL) to estimate the effect of health insurance coverage on rent and mortgage delinquency. Our identification strategy centers on states that did not expand Medicaid as part of the Affordable Care Act (ACA). We employ a fuzzy regression discontinuity (RD) design, exploiting the income eligibility threshold to receive Marketplace subsidies (100% FPL) as a source of exogenous variation in insurance coverage. Marketplace subsidies result in an 11 percentage point increase in coverage among intent-to-treat households. Households with subsidized coverage are 41 percentage points less likely to be delinquent relative to uninsured households. Eligibility for subsidies is associated with a 25 percent decline in the delinquency rate and reduced exposure to out-of-pocket medical expenditure risk. Subsidy program costs are partially offset by social welfare benefits accruing from fewer evictions/foreclosures.
Keywords: Regression discontinuity, Affordable Care Act, Obamacare, exchanges, bankruptcy, LMI households, Medicaid, coverage gap
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