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U study: Medicaid expansion improved finances of lower income Americans

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New University of Minnesota research found the Medicaid expansion improved the finances of low income residents in the states that chose the option under the Affordable Care Act. 

"We saw that people had significant reductions in their likelihood of having unpaid medical bills," said study co-author Ezra Golberstein, "and we saw that people were significantly more satisfied with their finances if they lived in states that expanded the Medicaid program to low-income adults."

The findings are based on 2012 and 2015 data from the National Financial Capability Study. The expansion became effective in 2014.  

In 2012, 47 percent of low-income adults reported past due medical bills in non-expansion states. The rate was 43 percent in states that would go on to expand Medicaid. 

In non-expansion states, the share of unpaid medical bills had fallen 7 percentage points by 2015, "perhaps reflecting an improving economy and falling uninsurance due to other mechanisms," the study said. 

But in expansion states fewer than one third — 30 percent ‐ had unpaid medical bills, a 13 percentage point decline.

Financial satisfaction, as reported on a 10-point scale, also improved, again more in expansion states, where the average response rose 25 percent to 4.43 in 2015.

In non-expansion states, the average satisfaction score was also 4.43 in 2015, but had increased a smaller 13 percent. 

"The effect of the Medicaid expansion closes about a quarter of the gap in financial satisfaction between low-income and median-income individuals," the study concludes.