Panel Paper: Medicare and the Geography of Financial Health

Thursday, November 7, 2019
I.M Pei Tower: Majestic Level, Majestic Ballroom (Sheraton Denver Downtown)

*Names in bold indicate Presenter

Paul Goldsmith-Pinkham1, Maxim Pinkovskiy1 and Jacob Wallace2, (1)Federal Reserve Bank of New York, (2)Yale University

This paper estimates the impact of health insurance on financial health. Although a primary goal of health insurance is to protect against financial risk, most studies focus on the impact of insurance on health care use and outcomes. We assess the impact of a change in health insurance on financial strain by examining individuals as they age onto Medicare at age 65. With a five percent sample of Americans' credit score data, we implement a regression discontinuity design to examine how financial strain changes at age 65. Individuals with debt in collections experience a reduction of $384 (a 26% decrease) at age 65, concentrated among those with higher debt in collections. We also document reductions in debt in delinquency and bankruptcy for some subgroups. There was considerable geographic heterogeneity in the reduction of financial strain at age 65, with the largest effects in counties with higher near-elderly uninsurance rates.