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The effect of health insurance coverage on personal bankruptcy: evidence from the Medicaid expansion

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  • Masanori Kuroki

    (Arkansas Tech University)

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.

Suggested Citation

  • Masanori Kuroki, 2021. "The effect of health insurance coverage on personal bankruptcy: evidence from the Medicaid expansion," Review of Economics of the Household, Springer, vol. 19(2), pages 429-451, June.
    • Handle: RePEc:kap:reveho:v:19:y:2021:i:2:d:10.1007_s11150-020-09492-0
    DOI: 10.1007/s11150-020-09492-0
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    Cited by:

    1. Bradley T. Heim & Elena Patel & Shanthi Ramnath, 2023. "Medicaid-ing Uninsurance? The Impact of the Affordable Care Act’s Medicaid Expansion on Uninsurance Spells," Working Paper Series WP 2023-41, Federal Reserve Bank of Chicago.
    2. Yuxia Song & Yongxi Chen, 2024. "Between restriction and protection: the experience, problems, and improvement path of judicial recognition of personal bankruptcy exempt property in China," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-15, December.

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    More about this item

    Keywords

    Bankruptcy; Personal finance; Health; Medical expense; Health insurance;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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