Senior Research Analyst
Expanding Medicaid to low-income adults under health reform improves the financial well-being of those newly eligible for Medicaid, a recent analysis published by the National Bureau of Economic Research (NBER) finds. Adults in the geographic areas within expansion states with the largest share of low-income, uninsured individuals have fewer debts sent to third-party collection agencies — and smaller total debts in collection — than adults in similar areas of non-expansion states. Improved financial well-being can translate into greater access to credit, higher savings, and higher consumption of goods and services.
This study, the first national study on Medicaid’s impact on the financial well-being specifically of adults made eligible under health reform, adds to a growing body of research on Medicaid’s benefits for families’ financial stability. For example:
The NBER analysis examined people likely eligible for Medicaid rather than those actually enrolled — a common limitation of research in this area that tends to understate the effects of Medicaid enrollment. After adjusting their estimates using basic assumptions about Medicaid participation among those eligible, the authors estimate that Medicaid enrollment reduced total non-medical debt in collections by $600 to $1,000 per person.
Medicaid’s contribution to enrollees’ financial well-being is just one reason for states to expand coverage to low-income adults under health reform. The Medicaid expansion has also improved access to care, produced state savings, and supported health care providers. Thirty-one states plus the District of Columbia have expanded coverage, with Louisiana poised to do so in July.