Two in five Americans have medical debt, nearly half of whom owe at least $2,500. Concerned by this burden, governments and private donors have undertaken large, high-profile efforts to relieve medical debt. We partnered with RIP Medical Debt to conduct two randomized experiments that relieved medical debt with a face value of $169 million for 83,401 people between 2018 and 2020. We track outcomes using credit reports, collections account data, and a multimodal survey. There are three sets of results. First, we find no impact of debt relief on credit access, utilization, and financial distress on average. Second, we estimate that debt relief causes a moderate but statistically significant reduction in payment of existing medical bills. Third, we find no effect of medical debt relief on mental health on average, with detrimental effects for some groups in pre-registered heterogeneity analysis.
Authors
- Acknowledgements & Disclosure
- We are grateful to seminar and conference participants at Harvard Business School, Northwestern Kellogg Strategy, University of Chicago Health, Stanford Institute for Economic Policy Research, University of Duisburg-Essen, University of Wisconsin–Madison, Chicago Booth Finance, Waseda University, NBER Economics of Health, NBER Household Finance, the AEA Health Economics Research Organization Session, and BYU Finance for helpful comments. We thank Constantine Yannelis and Tal Gross for thoughtful discussions of the paper and Will Dobbie, Zack Cooper, Amy Finkelstein, Paul Goldsmith-Pinkham, and Matt Notowidigdo for thoughtful comments. The experiments reported in this study are listed in the AEA RCT Registry (#0003332, #0003664, and #0007426) and were approved by Stanford IRB (#57138). We gratefully acknowledge J-PAL North America, the National Institutes of Health (R01 AG066890-01A1), and the National Institute on Aging (T32-AG000186) for financial support and RIP Medical Debt for their partnership on the study. We thank Julie Gasparac, Laurie Imhof, and Nithya Rajendran at NORC at the University of Chicago for survey implementation, and Jinglin Wang, Bruno Mauricio Escobar Izquierdo, Zahra Thabet, and Eleanor Jenke for superb research assistance. Wesley Yin is currently serving in the Office of Management and Budget (OMB), and completed the work on this article prior to joining OMB. The views expressed in this article are those of the authors themselves, and do not necessarily represent the view of the United States or OMB. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
- DOI
- https://doi.org/10.3386/w32315
- Published in
- United States of America
