NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Bankruptcy as Implicit Health Insurance

Neale Mahoney

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).

download in pdf format
   (887 K)

email paper

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 - MARC, RIS, BibTeX

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
Kowalski 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, L√łken, and Salvanes w18086 Care or Cash? The Effect of Child Care Subsidies on Student Performance
White w13265 Bankruptcy Reform and Credit Cards
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us