Evidence: Obamacare Has Helped the Poorest

The poorest Americans in states that adopted the Affordable Care Act’s Medicaid expansion are financially better off today than their peers in states that did not expand the health-insurance program, research suggests.

After a Supreme Court ruling made expansion of Medicaid under President Obama’s trademark health-care expansion optional, 29 states and the District of Columbia expanded the program in some form. The 21 remaining states did not, setting up an opportunity to analyze the financial effects on those who should have benefited, according to the Federal Reserve Bank of Chicago’s Luojia Hu, Bhashkar Mazumder, and Ashley Wong; University of Illinois at Chicago’s Robert Kaestner; and University of Michigan’s Sarah Miller.

The research suggests that for poor Americans who do not have health insurance, medical bills can upend lives. Unable to pay arriving bills, some overborrow to make ends meet and wind up being pursued by debt collectors.

Citing data from the Medical Expenditure Panel Survey, the researchers report that the annual cost of inpatient care for a person aged 18–64 who was hospitalized in 2012 was $15,000—and the annual total amount spent on health care for that person was $25,000. They estimate that people facing such bills without insurance face a 170 percent increase in unpaid medical bills and are twice as likely to file for bankruptcy.

But “Medicaid expansions that began in 2014 significantly reduced the number of unpaid non-medical bills and the amount of non-medical debt sent to third-party collection agencies among people living in zip codes that are most likely affected by the expansions,” they write.

After examining a nationwide database of credit reports, they estimate that people who received new Medicaid coverage had between $600 and $1,000 less in unpaid balances in collection. Total Medicaid enrollment in expansion states increased by 12.3 million people between 2013 and 2015.