Medicare and the Geography of Financial Health

91 Pages Posted: 23 Jan 2020

See all articles by Paul Goldsmith-Pinkham

Paul Goldsmith-Pinkham

Federal Reserve Banks - Federal Reserve Bank of New York

Maxim Pinkovskiy

Federal Reserve Bank of New York

Jacob Wallace

Yale University - School of Public Health

Date Written: January 2020

Abstract

We use a five percent sample of Americans’ credit bureau data to study the effects of public health insurance on the geography of consumer financial health. Exploiting the nearly universal eligibility for Medicare at age 65, we find a 30 percent reduction in the level of debts in collections with limited effects on other financial outcomes. Medicare reduces the geographic variation in collections by two-thirds at age 65 and halves the geographic correlation between collections and demographics like race and education. Areas that experienced the largest gains in financial health at age 65 had higher shares of black residents, people with disabilities, and for-profit hospitals.

Keywords: Medicare, household finance, heterogeneity

JEL Classification: G510, G520, I130

Suggested Citation

Goldsmith-Pinkham, Paul and Pinkovskiy, Maxim and Wallace, Jacob, Medicare and the Geography of Financial Health (January 2020). FRB of New York Staff Report No. 911, January 2020. Available at SSRN: https://ssrn.com/abstract=3522721 or http://dx.doi.org/10.2139/ssrn.3522721

Paul Goldsmith-Pinkham

Federal Reserve Banks - Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Maxim Pinkovskiy (Contact Author)

Federal Reserve Bank of New York ( email )

Jacob Wallace

Yale University - School of Public Health ( email )

PO Box 208034
60 College Street
New Haven, CT 06520-8034
United States

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