Losing public health insurance: TennCare reform and personal financial distress

A primary goal of health insurance is smoothing the financial risk associated with health shocks. We estimate the effect of exposure to health-insurance reform on individual-level financial well-being. Utilizing a plausibly exogenous shock to health insurance status resulting from a sudden disenrollment from Tennessee's Medicaid program in 2005, we find that the reform resulted in a 2.78 point decline in credit risk score for an individual in the median county in Tennessee. This study is the first examining the impact of losing any form of public assistance on personal financial well-being and our results inform ongoing discussions around Medicaid reform.