Medicaid and Financial Health

66 Pages Posted: 2 Nov 2017

See all articles by Kenneth P. Brevoort

Kenneth P. Brevoort


Daniel Grodzicki

Penn State Economics

Martin B. Hackmann

University of California, Los Angeles (UCLA); National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: October 30, 2017


This paper investigates the effects of the Medicaid expansion provision of the Affordable Care Act (ACA) on households' financial health. Our findings indicate that, in addition to reducing the incidence of unpaid medical bills, the reform provided substantial indirect financial benefits to households. Using a nationally representative panel of 5 million credit records, we find that the expansion reduced unpaid medical bills sent to collection by $3.4 billion in its first two years, prevented new delinquencies, and improved credit scores. Using data on credit offers and pricing, we document that improvements in households' financial health led to better terms for available credit valued at $250 million per year. We calculated that the financial benefits of Medicaid double when considering these indirect benefits in addition to the direct reduction in out-of-pocket expenditures.

JEL Classification: D14, H51, I13

Suggested Citation

Brevoort, Kenneth and Grodzicki, Daniel and Hackmann, Martin B., Medicaid and Financial Health (October 30, 2017). Becker Friedman Institute for Research in Economics Working Paper No. 2017-06. Available at SSRN: or

Kenneth Brevoort (Contact Author)


No Address Available

Daniel Grodzicki

Penn State Economics ( email )

524 Kern Graduate Building
University Park, PA 16802-3306
United States

Martin B. Hackmann

University of California, Los Angeles (UCLA) ( email )

8283 Bunche Hall
Mail Stop: 147703
Los Angeles, CA 90095
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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