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The ACA Medicaid expansion increased the number of individuals enrolled in Medicaid, reducing the risk that many will have to pay for medical procedures out of pocket. While this decreased the medical bankruptcy rate, the exact magnitude of this impact is unknown. Using a difference-in-differences model with controls and a fixed effects model with an instrumental variable, I find a consistent estimate of 50,000-70,000 bankruptcies prevented by the ACA Medicaid expansion between 2014-2016 among low-income individuals, an approximate 8% decrease in the bankruptcy rate. This effect is stronger among those earning below the median income; there is no evidence of a similar effect among those earning above the median income. These results are strengthened through a series of falsification tests and robustness checks.
Zwiefel, Noah, "What is the impact of a Medicaid expansion on the bankruptcy rate? Evidence from the ACA" (2019). Economics Honors Projects. 98.
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