The effect of health insurance on home payment delinquency: Evidence from ACA Marketplace subsidies

We use administrative tax data and survey responses to quantify the effect of subsidized health insurance on rent and mortgage delinquency. We employ a regression discontinuity (RD) design, exploiting the income threshold for receiving Marketplace subsidies in states that did not expand Medicaid under the Affordable Care Act. Among households targeted by the policy, eligibility for subsidies is associated with a roughly 25 % decline in the delinquency rate and reduced exposure to out-of-pocket medical expenditure risk. IV treatment effects are significant, indicating that the decline in the delinquency rate is related to participation in health insurance. We show that, under plausible assumptions, the social benefits implied by our RD estimates, in terms of fewer evictions and foreclosures, are substantial.