TY  - JOUR
AU  - Mahoney,Neale
TI  - Bankruptcy as Implicit Health Insurance
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18105
PY  - 2012
Y2  - May 2012
UR  - http://www.nber.org/papers/w18105
L1  - http://www.nber.org/papers/w18105.pdf
N1  - Author contact info:
Neale Mahoney
Booth School of Business
University of Chicago
5807 South Woodlawn Avenue
Chicago, IL 60637
Tel: 773/702-9278
E-Mail: Neale.Mahoney@chicagobooth.edu
AB  - 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).
ER  -