Effect of the ACA on Personal Debt – It Goes Down

by John W Rodat on April 21, 2016

This is as we – or at least most of us – would expect.

Compared to people in states that did not expand Medicaid under the ACA, newly available Medicaid in States that expanded the program enabled newly covered people to reduce their unpaid bills and debts. 

Luojia Hu, Robert Kaestner, Bhashkar Mazumder, Sarah Miller, and Ashley Wong wrote: 

The Effect of the Patient Protection and Affordable Care Act Medicaid Expansions on Financial Well-Being (PDF)

NBER Working Paper No. 22170, April 2016

Their abstract:

We examine the effect of the Medicaid expansions under the 2010 Patient Protection and Affordable Care Act (ACA) on financial outcomes using credit report data for a large sample of individuals. We employ the synthetic control method (Abadie et al., 2010) to compare individuals living in states that expanded Medicaid to those that did not. We find that the Medicaid expansions significantly reduced the number of unpaid bills and the amount of debt sent to third- party collection agencies among those residing in zip codes with the highest share of low income, uninsured individuals. Our estimates imply a reduction in collection balances of around $600 to $1,000 among those who gain Medicaid coverage due to the ACA. Our findings suggest that the ACA Medicaid expansions had important financial impacts beyond health care use 

Good to have evidence

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