Peer Reviewed Publications

• “Missouri’s Medicaid Contraction and Consumer Financial Outcomes” (with James Bailey and Slava Mikhed), American Journal of Health Economics, Accepted

  • Abstract: In July 2005, a set of cuts to Medicaid eligibility and coverage went into effect in the state of Missouri. These cuts resulted in the elimination of the Medical Assistance for Workers with Disabilities program, more stringent eligibility requirements, and less generous Medicaid coverage for those who retained their eligibility. Overall, these cuts removed about 100,000 Missourians from the program and reduced the value of the insurance for the remaining enrollees. Using data from the Medical Expenditure Panel Survey, we show how these cuts increased out-of-pocket medical spending for individuals living in Missouri. Using individual-level credit bureau data and employing a border discontinuity differences-in-differences empirical strategy, we show that the Medicaid reform led to increases in both credit card borrowing and debt in third-party collections. When comparing our results with the broader literature on Medicaid and consumer finance, which has generally measured the effects of Medicaid expansions rather than cuts, our results suggest there are important asymmetries in the financial effects of shrinking a public health insurance program when compared with a public health insurance expansion.

    Working paper version: Federal Reserve Bank of Philadelphia Working Paper 20-42

• “Health Insurance and Young Adult Financial Distress” (with Slava Mikhed), Journal of Policy Analysis and Management, 2023, 42(2): 393-423.

  • Abstract: We study how health insurance eligibility affects financial distress for young adults using the Affordable Care Act’s (ACA) dependent coverage mandate-the part of the ACA that requires private health insurance plans to cover individuals up to their 26th birthday. We examine the effects of both gaining and losing eligibility by exploiting the mandate’s implementation in 2010 and its automatic disenrollment mechanism at age 26. Our estimates show that increasing access to health insurance lowers young adults’ out-of-pocket medical expenditures and debt in third-party collections. However, the reductions in financial distress are transitory, as they diminish after an individual loses access to parental insurance when they age out of the mandate at age 26.

    Working paper version: Federal Reserve Bank of Philadelphia Working Paper 19-54 (Previously circulated as “Did the ACA’s Dependent Coverage Mandate Reduce Financial Distress for Young Adults?” in Federal Reserve Bank of Philadelphia Working Paper 18-03.)

• “The Effect of State Health Insurance Benefit Mandates on Premiums and Employee Contributions” (with James Bailey), Applied Economic Letters, 2016, 23(14): 1042-1046.

  • Abstract: The average US state has 40 benefit mandates, laws requiring health insurance to cover particular conditions, treatments, providers or people. We investigate the extent to which these mandates increase the health insurance premiums paid by employers, and the extent to which these higher premiums are passed on to employees in the form of higher employee contributions. We use state-level data on premiums and employee contributions to health insurance from the insurance component of the 1996–2011 Medical Expenditure Panel Survey. Our main analysis is a fixed effects regression that controls for age, race, income, union membership and the presence of state mandate waivers. We find robust evidence that the average mandate increases premiums by approximately 0.6%, and that mandates lead to similar increases in employee contributions for single-coverage health insurance plans. Alternative specifications using an AR(1) error structure estimate a larger effect of mandates, while those using generalized estimating equations estimate smaller effects. We find that mandates requiring insurers to cover a specific benefit, as opposed to a specific type of provider or person, lead to the largest increases in employee contributions.

Working Papers

• “I’ve Got 99 Problems But a Bill Ain’t One: Hospital Billing Caps and Financial Distress in California” (with Yaa Akosa Antwi and Marion Aouad), Federal Reserve Bank of Philadelphia Working Paper 23-20.

  • Abstract: We examine the financial consequences of the 2007 California Fair Pricing Law (FPL), a law that places a price ceiling on hospital bills for uninsured and financially vulnerable individuals. Using difference-in-difference-in-differences models, we exploit cross-sectional variation in exposure to the law to estimate the causal effects of the FPL on different measures of financial distress. We find that the law reduces the medical and non-medical debt burden of individuals targeted by the law, with the likelihood of incurring non-medical debt in collections declining by 14.5 percent and the number of non-medical collections declining by 31 percent. The law also reduces the probability of having medical and non-medical debt balances between $1 and $1,000 in collections by 16.5 percent and 40 percent, respectively. Our results suggest that hospital billing regulations have direct and indirect effects on the personal financial outcomes of uninsured and financially vulnerable individuals.

• “Prior Fraud Exposure and Precautionary Credit Market Behavior” (with Ying Lei Toh), Federal Reserve Bank of Philadelphia Working Paper 22-36.

  • Abstract: This paper studies how past experiences with privacy shocks affect individuals’ take-up of precautionary behavior when faced with a new privacy shock in the context of credit markets. We focus on experiences with identity theft and data breaches, two kinds of privacy shocks that either directly lead to fraud or put an individual at an elevated risk of experiencing fraud. Using the announcement of the 2017 Equifax data breach, we show that individuals with either kind of prior fraud exposure were more likely to freeze their credit report and close credit card accounts than individuals with no prior exposure immediately after the announcement. We also find that prior victims of identity theft, a more serious type of exposure, were more likely to take precautionary actions than individuals who were victims of a previous data breach.

    Media Coverage: Take on Payments Blog

• “Gender Differences in Credit Card Limits: Evidence from Sole Mortgage Applicants” (with Anna Tranfaglia). (Previously circulated as “Decomposing Gender Differences in Bankcard Credit Limits” in Federal Reserve Bank of Philadelphia Working Paper 23-30.) (Revise and Resubmit, Journal of Money, Credit, and Banking)

  • Abstract: Using linked mortgage application and credit bureau data, we document the existence of unconditional and conditional gender gaps in the distribution of total bankcard limits. We estimate that male borrowers have approximately $1,300 higher total bankcard limits than female borrowers. This gap is primarily driven by a large gender gap in the right tail of the limit distribution. At the median and in the left tail of the total limit distribution, women have larger limits than men. Results from a Kitagawa-Oaxaca-Blinder decomposition show that 87 percent of the gap is explained by differences in the effect of observed characteristics, while 10 percent of the difference is explained by differences in the levels of observed characteristics. The gap is persistent across geographies but has varied over time. Overall, these gender gaps are small in economic magnitude and have changed over time favoring women.

    Media Coverage: CNBC, American Banker, Bankrate.com

• “Health Insurance as an Income Stabilizer” (with Emily A. Gallagher, Stephen Roll, and Michal Grinstein-Weiss), Federal Reserve Bank of Philadelphia Working Paper 20-05.

  • Abstract: We evaluate the effect of health insurance on the incidence of negative income shocks using the tax data and survey responses of nearly 14,000 low income households. Using a regression discontinuity (RD) design and variation in the cost of nongroup private health insurance under the Affordable Care Act, we find that eligibility for subsidized Marketplace insurance is associated with a 16% and 9% decline in the rates of unexpected job loss and income loss, respectively. Effects are concentrated among households with past health costs and exist only for “unexpected” forms of earnings variation, suggesting a health-productivity link. Calculations based on our fuzzy RD estimate imply a $256 to $476 per year welfare benefit of health insurance in terms of reduced exposure to job loss.

• “Financial Consequences of Severe Identity Theft in the U.S.” (with Julia Cheney, Robert Hunt, Slava Mikhed, Dubravka Ritter, and Michael Vogan), Federal Reserve Bank of Philadelphia Working Paper 21-41 (Previously circulated as “Identity Theft as a Teachable Moment” in Federal Reserve Bank of Philadelphia Working Paper 16-27.)

  • Abstract: We examine how a negative shock from severe identity theft affects consumer credit market behavior in the United States. We show that the immediate effects of severe identity theft on credit files are typically negative, small, and transitory. After those immediate effects fade, identity theft victims experience persistent increases in credit scores and declines in reported delinquencies, with a significant proportion of affected consumers transitioning from subprime-to-prime credit scores. Those consumers take advantage of their improved creditworthiness to obtain additional credit, including auto loans and mortgages. Despite having larger balances, these individuals default on their loans less than they did prior to the identity theft incident.

Works In-progress

• “Gender Differences in Bankcard Credit Limit Changes” (with Anna Tranfaglia)

• “Hospital Demand for Liquidity During the First Year of the COVID-19 Pandemic” (with David A. Benson)

• “Health Insurance, Consumption, and Borrowing: Evidence from the Affordable Care Act’s Dependent Coverage Mandate” (with James Bailey, and Slava Mikhed)

• “Thirsty for Credit: Mortgage Lending During the Flint Water Crisis” (with Emily A. Gallagher)

• “Health, Basic Income, and Financial Distress” (with Marion Aouad)