Obamacare study: 25% decline in home delinquencies among newly insured poor people

Poor people were not the primary target of Obamacare; as a group, their care is more likely to be "non-compensated" (trips to the emergency room while classed as "indigent" and unable to pay), so insurance shouldn't make a big difference to them, right?


A recently updated study, The Effect of Health Insurance on Home Payment Delinquency: Evidence from ACA Marketplace Subsidies, from finance and business researchers affiliated with both academic business schools and several federal reserve banks, compares the rate of home payment delinquencies (mostly rent payments) among the poorest Americans who received Obamacare through Medicaid expansion with their counterparts in Red States that rejected the expansion and denied coverage to their poor citizens.

The headline finding is that poor people with health-care are 25% less likely to miss rent payments than their uninsured counterparts. That finding is stable year-over-year, too.

The authors argue that the cost of the Medicaid expansion can be offset with savings from evictions, which impose costs in excess of the costs of providing health care.

But of course, those savings are a pittance compared to the national savings we'd realize by eliminating for-profit, private healthcare altogether and replacing it with a national universal healthcare system.

Instead, low-income households may be the most sensitive to healthcare shocks. Her results counter the conventional wisdom that poor people put off healthcare spending; often, they can't. The study points to an example from Matthew Desmond's Evicted, which recounts the circumstances of poor renters across Milwaukee. "They had fallen behind [on rent] two months ago, when a neck X-ray and brain scan set Teddy back $507. Teddy's health problems began a year earlier, when he woke up in the hospital after tumbling down some steps," his account reads. Shocks were more pronounced for households that reported a history of health problems on the survey.

"Instead of having roughly a one-in-three chance of being delinquent if you are uninsured and have an income near the poverty line, your chances look more like one in five," Gallagher says, on the difference that subsidized health insurance makes.

For the Poor, Obamacare Can Reduce Late Rent Payments [Kriston Capps/Citylab]

(via Kottke)