Health Insurance Underwriting and the Heterogeneous Effects of the Affordable Care Act

The Affordable Care Act, the largest US welfare reform since 1965, banned health insurance underwriting and rejections based on pre-existing conditions and introduced large premium subsidies for low- to middle-income individuals. Yet how many people the ban made better off, and how its effects varied by health risk, remain unknown—because data on who was rejected before the reform have been lacking. Using a proprietary dataset of pre-ACA insurance applications and underwriting decisions, we document, model, and estimate the reform's heterogeneous effects by age, income, and health risk. We find its benefits were concentrated among low-income, high-risk, or over-50 individuals.