The Great Equalizer: Medicare and the Geography of Consumer Financial Strain
Working Paper 31223
DOI 10.3386/w31223
Issue Date
We use a five percent sample of Americans’ credit bureau data, combined with a regression discontinuity approach, to estimate the effect of universal health insurance at age 65—when most Americans become eligible for Medicare—at the national, state, and local level. We find a 30 percent reduction in debt collections—and a two-thirds reduction in the geographic variation in collections—with limited effects on other financial outcomes. The areas that experienced larger reductions in collections debt at age 65 were concentrated in the Southern United States, and had higher shares of black residents, people with disabilities, and for-profit hospitals.
Non-Technical Summaries
- There are large regional differences in the US in the prevalence of consumer financial distress as indicated by debt collection rates,...