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A3a ACA Premium Subsidies and Housing Expenditures among Renters
Key Words
Housing consumption, renters, health insurance, Affordable Care Act
Short Description
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 lower 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.
First & Corresponding Author
Guangyi Wang, Ohio State University
Authors in the order to be printed
Guangyi Wang, Lauren Jones, Tansel Yilmazer