Collector - October 2016 - 10

FYI $100 Average per capita collections decline in counties most affected by the Medicaid expansion in 2015. Source: Federal Reserve Bank of New York Liberty Street Economics blog STATE MEDICAID EXPANSION EXPANDED NOT EXPANDED The Financial Benefits of Medicaid Research shows Medicaid expansion reduces debt sent to collections. U .S. counties that expanded Medicaid since the implementation of the Affordable Care Act in the first quarter of 2014, and had a high uninsured rate before that time, experienced a decrease in debt sent to collection agencies, according to a recent study from researchers at the Federal Reserve Bank of New York. Fed analyst Nicole Dussault, economist Maxim Pinkovskiy and research officer Basit Zafar reviewed data from the Fed's Consumer Credit Panel, which includes financial indicators for consumers across the U.S. They used the total value of balances sent to a third-party collection agency within 12 months as a variable of interest. "Our findings are consistent with prior research that has provided evidence that health insurance is good for individual finances," they 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. 10 As of March 2016, 19 states declined to expand Medicaid after the U.S. Supreme Court ruled the government could not mandate the expansion, according to the researchers. They reviewed data from the first quarter of 2009 to the fourth quarter of 2015. "Since the [Consumer Credit Panel] does not collect insurance status for its respondents, we aggregate our data to the county level," the researchers wrote. They 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," they wrote. "If Medicaid expansion indeed decreased collections, we should see collections fall the most in these highuninsurance-rate-counties." 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 percent. The average rate in the first quintile of counties was 14.5 percent. "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 concluded that early evidence suggests the Medicaid expansion is "fulfilling the goal of health insurance, providing peace of mind by protecting against financial hardship." ACAINTERNATIONAL.ORG http://www.ACAINTERNATIONAL.ORG

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