Medicaid Expansion Enhances Financial Well-Being: Unpaid Bills and Debt Sent to Collection Agencies Decline in Expansion States

The perceived value of health coverage is often tied to its connection to keeping people healthy. Health insurance, however, like other forms of insurance, is a financial product. Its primary goal is to protect the holder against financial risk. A recent study shows that Medicaid expansion does just that – reducing unpaid bills, enhancing credit, and improving the financial status of both beneficiaries and their creditors.

Researchers from the National Bureau of Economic Research (NBER), the largest and one of the most respected economic research organizations in the nation, combed through millions of credit reports to gauge the impact of Medicaid expansion on debt and collections. They found that expansion significantly reduced the number of unpaid bills   and the amount of debt sent to collection agencies among people living in areas most impacted by expansion.

This finding is important not only for those covered by Medicaid expansion, but for their creditors. These businesses were more likely to be paid and less likely to refer debts to costly third-party collection agencies. The researchers concluded that individuals who gained coverage through Medicaid expansion may have better access to credit markets in the future, a key factor in economic mobility.

Evidence of the benefits of Medicaid expansion continues to mount. The sooner Kansas lawmakers expand KanCare, the sooner these benefits can be realized in Kansas.