Medicaid Expansion and Medical Debt: Evidence From Louisiana, 2014-2019

Objectives. To identify the association between Medicaid eligibility expansion and medical debt. Methods. We used difference-in-differences design to compare changes in medical debt for those gaining coverage through Louisiana's Medicaid expansion with those in nonexpansion states. We matched individuals gaining Medicaid coverage because of Louisiana's Medicaid expansion (n = 196 556) to credit report data on medical debt and compared them with randomly selected credit reports of those living in Southern nonexpansion state zip codes with high rates of uninsurance (n = 973 674). The study spanned July 2014 through July 2019. Results. One year after Louisiana Medicaid expansion, medical collections briefly rose before declining by 8.1 percentage points (95% confidence interval [CI] = -0.107, -0.055; P ≤ .001), or 13.5%, by the third postexpansion year. Balances also briefly rose before falling by 0.621 log points (95% CI = -0.817, -0.426; P ≤ .001), or 46.3%. Conclusions. Louisiana's Medicaid expansion was associated with a reduction in the medical debt load for those gaining coverage. These results suggest that future Medicaid eligibility expansions may be associated with similar improvements in the financial well-being of enrollees.