Public Health Insurance Expansion and Financial Well-Being Indicators Directly Evaluated by the Eligible: Evidence from the United States

Existing literature suggests that public health insurance expansion improves multiple indirect indicators of financial well-being (e.g., credit score, bankruptcy, debt sent to third-party collection agencies, and payday borrowing) of the newly eligible individuals in the United States. However, there is a lack of understanding of the association between these expansions and how the newly eligible individuals directly evaluate different aspects of their financial well-being in the post-expansion years. To address the gap, I use data from the National Financial Capability Study (NFCS) 2009, 2012, 2015, 2018, and 2021 waves and employ difference-in-differences and event study designs utilizing temporal and spatial variations in the expansion of Medicaid—a major public health insurance program in the country—under the 2010 Patient Protection and Affordable Care Act. As outcome variables, I use three indicators of financial well-being directly evaluated by the respondents in multiple waves of the NFCS: perceived financial difficulty, perceived over-indebtedness, and financial satisfaction. The findings suggest a link between 2014 Medicaid expansions and a reduction in perceived financial difficulty and over-indebtedness in 2021—the second year of the COVID-19 pandemic. However, findings also suggest that these expansions were not associated with financial satisfaction among the newly eligible in any of the post-expansion years. Overall, these findings indicate that although public health insurance expansion improves some aspects of financial well-being, it does not appear to change how the newly eligible individuals make an overall evaluation of their finances.