Having health insurance reduces housing delinquencies, study finds


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Personal household belongings on an urban sidewalk show the costs of eviction.

The expansion of health benefits under the 2010 Affordable Care Act has helped many more Americans gain insurance and have access to health care. But Obamacare’s legacy goes beyond just medicine. According to a new research study, greater access to health insurance also leads to a significant reduction in Americans becoming delinquent on rent and mortgage payments.

The study was published in the Journal of Public Economics. Emily Gallagher, the lead author, is a visiting scholar at the Center for Household Financial Stability at the Federal Reserve Bank of St. Louis.

Gallagher and her co-researchers used filings compiled by an online tax-preparation company in 2014, 2015, and 2016 – the first three years in which ACA policies were in effect.

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The research team compared data from states that chose to expand Medicaid versus those that did not – a construct that Gallagher called “a really nice research opportunity.” In states that did not expand Medicaid, there was a sharp divide between taxpayers just above the poverty line, who have access to subsidies that allowed them to access ACA Marketplaces, and those just below, who did not.

In the tax returns that the researchers mined, many filers had completed an optional survey. Among those who lived in non-expansion states – and who did not have access to an employer-paid insurance plan – there was a 46% increase in the rate of being insured as households qualified for the subsidized Marketplace plans.

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Having access to the Marketplace subsidies, in turn, corresponded to a 25% reduction in respondents saying that they had been delinquent with a rent or mortgage payment.

In contrast, in states that did expand Medicaid, having access to the Marketplace subsidies had no effect on delinquencies, since lower-income residents were better-covered.

“The large magnitude” of the effects observed by the study “suggest that health costs play a determinant role in the financial stability of low-income Americans,” Gallagher noted in a study summary.

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In an interview, Gallagher said she thinks of housing costs as “really the last bill you want to skip – you might juggle your electric with your gas payment or you might not make a cell phone payment.”

But the personal financial costs of missing a housing payment can be devastating. Losing a home to foreclosure can mean lost equity and wrecked credit. Evictions can be just as damaging, but as the researchers noted in their paper, aren’t tracked as robustly as foreclosures are.

“The broader takeaway is that the Affordable Care Act has downstream financial benefits to peoples’ lives that are not being fully scored by CBO or being factored in quantitatively by politicians when they make decisions about health insurance,” Gallagher told MarketWatch.

“There are a lot of costs to ACA – penalties and taxes being levied on people, particularly higher-income people, to pay for this, but there are also benefits that I don’t think we’ve been fully considering.”

See also: Housing crisis has led to breakdown of the social order, author says

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