Insurance Subsidies, the Affordable Care Act, and Financial Stability

Abstract

This paper measures the effects of subsidies in the Affordable Care Act on adverse financial outcomes and consumer welfare using administrative tax data and financial outcomes from credit data. Using multiple identification strategies, I find that ACA premium tax credits reduced the rate of foreclosures by 13%, consumer bankruptcies by 6%, and rates of other severely delinquent debts, particularly for credit-constrained consumers. The subsidies reduced the right tail of the debt distribution, including debts in third-party collections. The value of the risk protections against foreclosure, bankruptcy, and medical debt from these subsidies amounts to approximately 20-32% of their cash costs.

Samuel Dodini

PhD Candidate

My broad research interests include the economics of labor markets, incorporating insights from behavioral economics, occupational licensing, monopsony power, education, public finance, and urban economics.