Counties that had high uninsured rates prior to the implementation of the Affordable Care Act have seen per capita collection balances fall if their state expanded Medicaid.

That finding comes from researchers at the Federal Reserve Bank of New York. Analysts found a large difference between indebtedness trends in states that expanded Medicaid after the Affordable Care Act's Q1 2014 implementation versus those that have not.

Fed Senior research analyst Nicole Dussault, economist Maxim Pinkovskiy and research officer Basit Zafarreviewed the Fed’s Consumer Credit Panel data from the first quarter of 2009 to the fourth quarter of 2015. The data included financial indicators for consumers nationwide.

They used the total value of balances sent to a third-party collection agency within 12 months as a variable of interest. The researchers matched each county with its uninsured rate in 2013. 

"The idea behind this methodology is that the expansion of Medicaid under the [Affordable Care Act] should have had a larger impact on counties that had a high uninsured rate prior to implementation. If Medicaid expansion indeed decreased collections, we should see collections fall the most in these high-uninsurance-rate-counties,” the researchers wrote.

For example, counties with the highest uninsured rates in 2013 that expanded Medicaid had sharp decreases in their collection balances. The researchers divided counties into five uninsured rate quintiles with the fifth being the highest – at an average uninsured rate of 29.8%. The average rate in the first quintile of counties was 14.5%.

"Collection balances decrease sharply for fifth quintile counties in Medicaid expansion states but continue their upward trend for fifth quintile counties in states that did not expand Medicaid,” according to the report. "By the fourth quarter of 2015 … on average, collections declined by more than $100 per capita in the counties most affected by the Medicaid expansion relative to less affected counties. This is a sizable decline, given that the mean of collection balances over our sample period is $280 (and the standard deviation is $186.)"

The researchers also looked at the impact on credit card balances in states that expanded their Medicaid programs. The estimated average credit card balance decline in counties most affected by the Medicaid expansion in the fourth quarter 2015 is $200.

"Our findings are consistent with prior research that has provided evidence thathealth insurance is good for individual finances,” the researchers wrote in a blog post. They also noted that their analysis focuses only on the benefits of the Affordable Care Act expansion, not the associated costs.

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