Families with health insurance through the Affordable Care Act are significantly more likely to make their rent and mortgage payments than are those who remain uninsured, new research suggests.
The finding is based on an analysis of administrative tax data from roughly 5,000 low- and moderate-income (LMI) tax filers living in one of the 18 states that did not expand Medicaid during the 2015 and 2016 tax seasons.
“Mortgage delinquencies can be very costly, not only for the household but also for the local community.”
“Our study highlights important, unintended welfare benefits from health insurance,” says coauthor Radhakrishnan Gopalan, associate professor of finance at the Olin Business School at Washington University in St. Louis. “Mortgage delinquencies can be very costly, not only for the household but also for the local community. These benefits should be kept in mind when drafting a law to replace the ACA.”
“Consistent with research on Medicaid expansions, our data signal that medical bills from an unexpected health event consume fewer of the resources of people with coverage,” says lead author Emily Gallagher, postdoctoral research associate at the Brown School’s Center for Social Development at Washington University and at Olin.
“In turn, a higher level of liquid assets is associated with the lower rate at which households default on housing payments,” she adds.
Surprisingly, Gallagher says, the researchers also found that the majority of uninsured LMI filers would qualify for Medicaid or subsidized coverage but do not receive it.
Across all states that didn’t expand Medicaid, there remain about 2.6 million adults in insurance limbo, commonly called “the coverage gap,” Gallagher says. These adults earn too much to qualify for Medicaid but too little to be eligible for subsidized private insurance through Obamacare; subsidies which begin at incomes above 100 percent of the poverty line.
“Put together, our findings spotlight a substantial opportunity to improve the financial stability of LMI households through assisted enrollment in the ACA’s health insurance programs,” she says.
The project presents new evidence that, within just three years, expanded health insurance access for LMI populations through the ACA marketplaces likely reduced rent and mortgage hardship, “potentially lessening the prevalence of housing instability and the associated downstream outcomes documented by prior researchers,” Gallagher says.
The research brief is available online via the Brown School.