Families with ACA subsidies 25% less likely to miss rent, mortgage payments

Families with subsidized health insurance through the Affordable Care Act (ACA) may experience indirect financial benefits that extend past healthcare costs—to housing, according to new research published in the Journal of Public Economics. 

Specifically, families in states that expanded Medicaid coverage, with access to subsidized healthcare coverage, are 25 percent less likely to miss rent or mortgage payments, compared to families not covered by the ACA. 

“Overall, our regression discontinuity (RD) estimate suggests that the subsidy policy may have indirect financial benefits to the participant and to the broader society that go beyond health costs,” wrote lead author Emily A. Gallagher, of the University of Colorado Boulder.

At present, only 14 states have not voted to expand Medicaid. Most recently, Utah, Nebraska and Idaho voted to do so during the midterm elections in November 2018. This underscores the continued and rising importance of access to healthcare. CMS also recently hinted it could expand benefits to include paying for housing for Medicaid beneficiaries.

In states that expanded Medicaid coverage, families with incomes at or below 138 percent of the federal poverty level are covered by Medicaid. Gallagher and colleagues sought to determine how these families fare in paying their rent or mortgage.

Researchers obtained their data using administrative tax records from 2014 to 2016 and survey responses, and assessed households that are near the federal poverty line. They compared households that expanded Medicaid availability to those that did not, to determine the effect of subsidized health insurance on rent and mortgage.

“Among households targeted by the policy, eligibility for subsidies is associated with a roughly 25 percent decline in the delinquency rate and reduced exposure to out-of-pocket medical expenditure risk,” the researchers wrote.

According to the researchers’ calculation, 18 percent of delinquent mortgages are foreclosed within two years and 12 percent of the delinquent renter population face eviction. 

“To the extent that fewer delinquent home payments translate into fewer evictions and foreclosures, social benefits may accrue,” the researchers concluded.