The effect of the Affordable Care Act Medicaid expansion on consumer bankruptcies

Abstract Medical expenses have been associated with a large proportion of consumer bankruptcies in the United States. The objective of this study is to examine the relationship between the Medicaid expansion implemented in the context of the Affordable Care Act and consumer bankruptcy, overall and b...

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Bibliographic Details
Published in:Bulletin of economic research 2023-10, Vol.75 (4), p.1344-1361
Main Authors: Laberge, Maude, Djiffa, Kodjo‐Maawuegnigan
Format: Article
Language:English
Subjects:
Bankruptcy
Ethnicity
Insurance
Medicaid
Patient Protection & Affordable Care Act 2010-US
Personal bankruptcy
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Summary:Abstract Medical expenses have been associated with a large proportion of consumer bankruptcies in the United States. The objective of this study is to examine the relationship between the Medicaid expansion implemented in the context of the Affordable Care Act and consumer bankruptcy, overall and by chapter filing. We used a longitudinal study design with a study period of 2008–2017. We tested three approaches: difference‐in‐differences, fixed effect panel linear regression, and triple difference. We constructed a panel dataset from 2008 to 2017 with states’ data using data from various sources on insurance, bankruptcy filings, and characteristics that may affect bankruptcy, such as income and ethnicity. The outcomes were the annual rates of consumer bankruptcies overall and by chapter at the state level. Between 2008 and 2017, the overall unadjusted bankruptcy filing rate fell from 0.36% to 0.24%. We found that the expansion was associated with a decrease in overall consumer bankruptcy varying between 0.035 and 0.039 percentage points and that the intensity of the effect was modulated by the intensity of the treatment. Results were consistent across models and suggest that the Medicaid expansion had a significant negative effect on overall bankruptcy filings and specifically on Chapter 7 filings.
ISSN:0307-3378
1467-8586
DOI:10.1111/boer.12411