Losing Public Health Insurance: Tenncare Disenrollment and Personal Financial Distress

44 Pages Posted: 7 Sep 2017 Last revised: 21 Feb 2019

See all articles by Laura M. Argys

Laura M. Argys

University of Colorado at Denver - Department of Economics

Andrew Friedson

University of Colorado at Denver - Department of Economics

M. Melinda Pitts

Federal Reserve Bank of Atlanta

D. Tello-Trillo

University of Virginia

Date Written: 2017-08-01

Abstract

A main goal of health insurance is to smooth out the financial risk that comes with health shocks and health care. Nevertheless, there has been relatively sparse evidence on how health insurance affects financial outcomes. The few studies that exist focus on the effect of gaining health insurance. This paper explores the effect of losing public health insurance on measures of individual financial well-being. In 2005, the state of Tennessee dropped about 170,000 individuals from Medicaid, resulting in a plausibly exogenous shock to health insurance status. Both across- and within-county variation in the size of the disenrollment is linked with individual-level credit risk score and debt data to identify the effects. The results suggest that the disenrollment resulted in a 1.73 point decline in credit risk scores for the median individual in Tennessee. There is also evidence of increases in the amount and share of delinquent debt (90 days past due or more) and of increases in bankruptcy risk. These findings are mostly concentrated among individuals who were in relatively worse financial status before the disenrollment and suggest that there are significant negative consequences to current recipients that would need to be considered in the cost and benefit calculations around rollbacks of recent Medicaid expansions.

Keywords: Medicaid, public assistance, household finance, debt, bankruptcy

JEL Classification: D14, H75, I13

Suggested Citation

Argys, Laura M. and Friedson, Andrew and Pitts, M. Melinda and Tello-Trillo, D., Losing Public Health Insurance: Tenncare Disenrollment and Personal Financial Distress (2017-08-01). FRB Atlanta Working Paper No. 2017-6. Available at SSRN: https://ssrn.com/abstract=3031143

Laura M. Argys (Contact Author)

University of Colorado at Denver - Department of Economics ( email )

Campus Box 181
P.O. Box 173364
Denver, CO 80217-3364
United States
303-556-3547 (Fax)

Andrew Friedson

University of Colorado at Denver - Department of Economics ( email )

Campus Box 181
P.O. Box 173364
Denver, CO 80217-3364
United States

M. Melinda Pitts

Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street, NE
Atlanta, GA 30309-4470
United States
404-498-7009 (Phone)
404-498-8956 (Fax)

D. Tello-Trillo

University of Virginia ( email )

1400 University Ave
Charlottesville, VA 22903
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
35
Abstract Views
208
PlumX Metrics