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How Obamacare Affects Our Wallets And Debt Ratio


We've spent a lot of time tracking how the Affordable Care Act, or Obamacare, is affecting our health as a nation. Well, today we're going to take a different tack and ask how it affects our wallets. There's new research out on that. And here to explain it to us is NPR's social science correspondent Shankar Vedentam. Good morning.


KELLY: Hi. Set this up for us. What's the new research?

VEDANTAM: Well, people sometimes forget that Obamacare is, first and foremost, about insurance. And insurance is really about economics. When you buy car insurance, for example, it doesn't make your car run faster or be more efficient in terms of fuel. But if you get in a car crash, having insurance means you have a financial cushion to deal with any unexpected health or legal issues. So this new study is really asking a very simple question - do we see similar economic outcomes as a result of health insurance as we do with insurance in other domains?

KELLY: And I gather the experiment that they're looking at here is set up by the way that different states have implemented Obamacare.

VEDANTAM: That's right. I was speaking with Sarah Miller at the University of Michigan. Miller and her co-authors Luojia Hu, Robert Kaestner, Bhashkar Mazumder and Ashley Wong...

KELLY: That's a mouthful.

VEDANTAM: (Laughter) It is. They analyzed the credit reports of hundreds of thousands of Americans. And they used this quirk that you're just referring to, which is Obamacare called for an expansion of Medicaid. Medicaid, of course, is health coverage for poor people. And under the ACA, a larger pool of poor people was going to be eligible for Medicaid. Several states, largely states led by Republican leaders who were opposed to Obamacare, elected not to expand Medicaid. But what this meant is that some states expanded it. Some states didn't. And now you have the workings of a natural experiment. Here's Miller.

SARAH MILLER: Not all states adopted the Medicaid expansions of the ACA as was originally intended in the law. And so we were able to compare - how did these credit market outcomes evolve in states that opted to expand Medicaid through the ACA and states that chose not to?

KELLY: OK. Shankar, help us understand that. She said they're measuring credit market outcomes - kind of a wonky term - what does that mean?

VEDANTAM: It is a wonky term. Basically, what she was doing is she's look at the likelihood that people have unpaid bills and also have debts that are sent to collection agencies. Miller and her colleagues specifically looked at hundreds of ZIP codes around the country with high numbers of low income people. Presumably, these are people who would be affected by a Medicaid expansion. These are also people who might have their economic lives upended by a sudden health care emergency. Here's Miller.

MILLER: What we found is that in the states that took up the Medicaid expansions, we saw significantly fewer unpaid bills on people's credit reports. And the amount of money that was owed that was in these unpaid bills fell as well.

KELLY: Shankar, that seems like a fairly obvious conclusion - that in states where people have greater access to insurance, they're going to be less overwhelmed if they're suddenly find themselves in a medical crisis with huge bills.

VEDANTAM: I think that's exactly right. I mean, Obamacare has become this highly partisan and politicized issue. But the researchers here are actually not trying to make a political point. They're just merely establishing that this effect that's widely seen in other domains - having insurance can cushion you against sudden financial losses - is also at work here.

KELLY: Shankar, thanks so much.

VEDANTAM: Thank you.

KELLY: That is Shankar Vedentam. He is our social science correspondent. And he is also host of a podcast that explores the unseen patterns in human behavior. It's called Hidden Brain. Transcript provided by NPR, Copyright NPR.

Shankar Vedantam is NPR's social science correspondent and the host of Hidden Brain. The focus of his reporting is on human behavior and the social sciences, and how research in those fields can get listeners to think about the news in unusual and interesting ways. Hidden Brain is among the most popular podcasts in the world, with over two million downloads per week. The Hidden Brain radio show is featured on some 250 public radio stations across the United States.