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

• Published in: Journal of public economics Vol. 172; pp. 67 - 83
• Main Authors: Gallagher, Emily A., Gopalan, Radhakrishnan, Grinstein-Weiss, Michal
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.04.2019
• Subjects: Affordable Care Act; Eviction; Exchanges; Foreclosure; Medicaid; Mortgage; Out-of-pocket; Rent; D10; Out-of-pocket; H51; Mortgage; Foreclosure; Eviction; I13; Exchanges; Medicaid; Affordable Care Act; Rent
• ISSN: 0047-2727; 1879-2316
• DOI: 10.1016/j.jpubeco.2018.12.007

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. •The rate of health insurance coverage jumps by about 6% at the income threshold for ACA Marketplace subsidies.•Among households targeted by the policy, the rate of home payment delinquency falls by 25% at the eligibility threshold.•Out-of-pocket medical spending declines by $1,054 per eligible household at the 90th percentile of the spending distribution.•The social benefits from fewer delinquencies might amount to $441–$683 per subsidy eligible person.