Abstract
This paper quantifies the costs of leaving medical bills unpaid and what these costs imply for the value of health insurance to beneficiaries. We argue that a large fraction of unpaid medical bills is sent to third-party collections and reported to credit bureaus, with detrimental effects on patients' credit outcomes. Combining a large panel of credit records with data on credit offers, we find that the ACA Medicaid expansion reduced newly-reported medical collections by $5.89 billion and led to better terms of credit. We find that the financial benefits of Medicaid at least double when including this indirect credit channel.
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