Did Medicaid Expansion Reduce Medical Divorce?
Medical divorce occurs when couples divorce so that one spouse’s medical bills do not deplete the assets of the healthy spouse. We develop a model of medical divorce that demonstrates that divorce is optimal when a couple’s joint assets exceed the exempted asset level. We use the Affordable Care Act’s Medicaid expansion which removed asset tests to qualify for Medicaid as exogenous variation in the incidence of divorce. We find that the ACA expansion decreased the prevalence of divorce by 11.6% among those ages 50-64 with a college degree. Our results suggest that Medicaid expansion reduced medical divorce.
Document Object Identifier (DOI): 10.3386/w23139
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