Title

The Effect of Health Insurance Coverage on Personal Bankruptcy: Evidence from the Medicaid Expansion

Document Type

Article

Publication Date

6-1-2021

Department

School of Business

Abstract

This paper investigates the effects of health insurance coverage among low-income people on personal bankruptcies at the county level and the state level, based on the hypothesis that having health insurance reduces the risk of medical out-of-pocket spending and consequently decreases the likelihood of financial distress. In order to estimate the causal effects of health insurance coverage on personal bankruptcy, I exploit the Medicaid expansion under the Affordable Care Act as a source of exogenous variation in health insurance coverage and use it as an instrumental variable. Using bankruptcy filings from the US Court, I find that an increase in the share of low-income people with health insurance reduces Chapter 7 bankruptcy rates both at the county level and state level. The implied magnitudes of my estimated impacts are quantitatively important.

DOI

10.1007/s11150-020-09492-0

First Page

429

Last Page

451

Volume

19

Issue

2

ISSN

15695239

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