Bankruptcy as Implicit Health Insurance
NBER Working Paper No. 18105
Issued in May 2012
NBER Program(s):HC, HE, LE, PE
This paper examines the implicit health insurance households receive from the ability to declare bankruptcy. Exploiting cross-state and within-state variation in asset exemption law, I show that uninsured households with greater seizable assets make higher out-of-pocket medical payments, conditional on the amount of care received. In turn, I find that households with greater wealth-at-risk are more likely to hold health insurance. The implicit insurance from bankruptcy distorts the insurance coverage decision. Using a microsimulation model, I calculate that the optimal Pigovian penalties are similar on average to the penalties under the Affordable Care Act (ACA).
The NBER Bulletin on Aging and Health provides summaries of publications like this.
You can sign up to receive the NBER Bulletin on Aging and Health by email.
Machine-readable bibliographic record -
Document Object Identifier (DOI): 10.3386/w18105
Users who downloaded this paper also downloaded* these:
|Chetty and Finkelstein
||w18433 Social Insurance: Connecting Theory to Data
||w18108 Estimating the Tradeoff Between Risk Protection and Moral Hazard with a Nonlinear Budget Set Model of Health Insurance
|Finkelstein, Taubman, Wright, Bernstein, Gruber, Newhouse, Allen, Baicker, and Study Group
||w17190 The Oregon Health Insurance Experiment: Evidence from the First Year
|Black, Devereux, Løken, and Salvanes
||w18086 Care or Cash? The Effect of Child Care Subsidies on Student Performance
||w13265 Bankruptcy Reform and Credit Cards