ACA Premium Subsidies and Housing Expenditures among Renters
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Date
2019-03
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Abstract
The life-cycle model suggests that uninsured households facing unpredicted, large medical expenditures should reduce their consumption and maintain a savings buffer against financial shortfalls. For low-income households, housing represents the largest consumption expenditure. This implies that low-income households should increase their housing consumption when they obtain health insurance. In this study, we examine the effect of health insurance on housing decisions of renters using the introduction of marketplace insurance and premium subsidies under the Affordable Care Act (ACA). We exploit a regression discontinuity design. By comparing renters with income just below and just above the subsidy eligibility threshold in Medicaid non-expansion states, we identify the causal effect of health insurance on renters’ housing consumption. Our preliminary results show that renters who are eligible for premium subsidies have higher monthly rent expenditures. Our findings have important implications for subsequent physical and mental well-being of low-income households.
Description
Education and Human Ecology: 3rd Place (The Ohio State University Edward F. Hayes Graduate Research Forum)
Keywords
Affordable Care Act, Housing expenditures, Health insurance, renters