Staff Reports
Medicare and the Geography of Financial Health
Number 911
January 2020

JEL classification: I13

Authors: Paul Goldsmith-Pinkham, Maxim L. Pinkovskiy, and Jacob Wallace

We use a five percent sample of Americans’ credit bureau data to study the effects of public health insurance on the geography of consumer financial health. Exploiting the nearly universal eligibility for Medicare at age 65, we find a 30 percent reduction in the level of debts in collections with limited effects on other financial outcomes. Medicare reduces the geographic variation in collections by two-thirds at age 65 and halves the geographic correlation between collections and demographics like race and education. Areas that experienced the largest gains in financial health at age 65 had higher shares of black residents, people with disabilities, and for-profit hospitals.

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AUTHOR DISCLOSURE STATEMENT(S)
Paul Goldsmith-Pinkham
I declare that I have no relevant or material financial interests that relate to the research described in this paper.

Maxim Pinkovskiy
The author declares that he has no relevant or material financial interests that relate to the research described in this paper.

Jacob Wallace
The author declares that (s)he has no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.