Medicaid coverage improves low-income peoples’ financial credit, new research shows by comparing states that have adopted the Affordable Care Act’s Medicaid expansion and those that haven’t. Along with other research showing that Medicaid improves other aspects of financial health as well as physical health and access to care, the study highlights the benefits of Medicaid for expansion states — a group that now includes Maine, where voters recently approved an initiative to adopt the expansion.
Medicaid enrollees get an indirect financial benefit as great as the direct benefits of lower out-of-pocket health care costs. With fewer and lower unpaid medical bills, these adults had better credit, qualifying them for lower-interest mortgage, auto, and credit card loans — leading to estimated savings that averaged $280 per adult per year on interest payments, and an estimated $520 million across the expansion population. In addition, these adults avoided the hassle costs and legal costs associated with unpaid medical bills.
Over half of the uninsured have trouble paying their medical bills, a rate that’s more than double those with health insurance, Kaiser Family Foundation research shows. But low-income adults in Medicaid expansion states have fewer and smaller unpaid medical bills, the new research shows. The chance of accruing new medical debt was 20 percent lower in expansion states, and among adults in the 19 expansion states studied, expansion coverage lowered unpaid medical bills sent to collection agencies by $1.7 billion a year. Credit improvements were greatest for those with the lowest income and those with the greatest medical debt accrued before the Medicaid expansion.
These latest findings are part of a growing body of research that highlights the significant short- and long-term benefits of health coverage, particularly Medicaid, for the uninsured.