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The effect of ACA Marketplace subsidies on residential mortgage applications and originations

Author

Listed:
  • Fanyu Liu

    (Tulane University)

  • Kerui Geng

    (Tulane University)

Abstract

This paper examines the impact of health insurance subsidies on the financial investments of low-income households. Specifically, we estimate the impact of Affordable Care Act (ACA) health insurance exchange (Marketplace) subsidies on mortgage applications and originations using comprehensive mortgage application record data. We use a difference-in-differences approach that exploits variation in county health insurance coverage rates at the time of reform. We find that the subsidies increased the amount of residential mortgages applied for by low-income households and the amount actually originated by financial institutions. To explore potential mechanisms, we use survey data and find that these subsidies increased low-income households' health insurance coverage rates, reduced large-scale household medical expenditures and mortgage delinquency rates. These findings highlight an aspect of the broader economic impact of the ACA health insurance subsidies beyond increasing coverage rates among the targeted group.

Suggested Citation

  • Fanyu Liu & Kerui Geng, 2024. "The effect of ACA Marketplace subsidies on residential mortgage applications and originations," Working Papers 2406, Tulane University, Department of Economics.
    • Handle: RePEc:tul:wpaper:2406
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    File URL: http://repec.tulane.edu/RePEc/pdf/tul2406.pdf
    File Function: First Version, March 2024
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    More about this item

    Keywords

    Residential Mortgage; ACA Marketplace; Health Insurance;
    All these keywords.

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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