Description:

Wesley Yin (UCLA): “Randomized Acts of Kindness: Effects of Medical Debt Relief”

Abstract: One in six Americans has unpaid medical debt in collections amounting to more than $140 billion nationally, yet there is limited understanding of its impacts on households. We analyze the effects of randomized medical debt relief totaling $175 million across more than 80,000 households using three data sources: (1) administrative data on future debt sent to collections; (2) quarterly credit report data spanning at least two years before and after debt relief; and, (3) survey measures of self-reported health (clinically-validated screenings for depression, anxiety, and general health), health care utilization, and financial well-being elicited one year after treatment. We detect no significant effects of debt relief on credit score or access to credit, and no  effects on mental or general health 12 months after the intervention. However, we estimate an increase in future medical bills sent to collections by the original health care provider, which are not reported to credit bureaus. Together, our results imply that reducing an individual's stock of medical debt has limited benefits, particularly for individuals facing a continued flow of health expenditures that are unmitigated by health insurance. (Please note abstract is currently for internal use only, do not post online).