Household belongings on an urban sidewalk show the costs of eviction.The extension of health benefits under the Affordable Care Act 2010 has helped many more Americans get insurance and have access to health care. But the legacy of Obamacare is not limited to medicine. According to a new study, better access to health insurance would also significantly reduce the number of Americans who become delinquent in rents and mortgage payments.
the study was published in the Journal of Public Economics. Emily Gallagher, the lead author, is a visiting researcher at the Center for Household Financial Stability at the Federal Reserve Bank of St. Louis.
Gallagher and his co-investigators used documents compiled by an online tax preparation company in 2014, 2015 and 2016 – the first three years in which ACA policies were in effect.
The research team compared data from states that chose to extend Medicaid over those who did not – a concept that Gallagher called "a very good research opportunity." In states that did not extend Medicaid, there was a clear gap between taxpayers just above poverty. line, who have access to the grants that allowed them to access ACA's markets, and those who are just below them, who do not.
In the tax returns extracted by the researchers, many taxfilers had completed an optional survey. Among those who lived in non-expansive states – and who did not have access to an employer-paid insurance plan – the insured rate as qualified households for the Subsidized market schemes increased by 46%.
Having access to market subsidies was in turn a 25% reduction in the number of respondents saying they were late with a rent or mortgage payment.
In contrast, in states that extended Medicaid, access to market subsidies had no effect on unpaid bills, as low-income residents were better covered.
"The wide-ranging" effects observed in the study "suggest that health costs play a critical role in the financial stability of low-income Americans," noted Gallagher in a summary of the study.
In an interview, Gallagher said that she considered housing costs as "the last bill to avoid – you could juggle your electricity payment or your gasoline payment or not pay with a cell phone".
But the personal financial cost of missing a housing payment can be devastating. Losing a home on foreclosure can lead to loss of capital and loss of credit. Expulsions can be just as damaging, but as the researchers pointed out in their article, they are not followed as rigorously as seizures.
"The broader conclusion is that the Affordable Care Act has financial benefits downstream from the lives of people who are not fully assessed by CBO or quantitatively considered by politicians when making decisions about the care of their loved ones. 'health insurance,' Gallagher told MarketWatch.
"There are a lot of costs for ACA – penalties and taxes are levied on people, especially high-income people, to pay for this, but there are also benefits that I do not think we have fully taken into account."