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
Date Written: April 11, 2018
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
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