The Affordable Care Act reduced the risk of bankruptcy for individuals who lost and gained health insurance coverage, a new study from University of Denver and University of Colorado researchers discovered.

Previous research attempted to connect health insurance to bankruptcy filings. Those findings included a relationship between how generous a state’s Medicaid benefits were and the number of bankruptcies, as well as a lesser increase in bankruptcies among states that expanded their Medicaid benefits in the 1990s relative to those states that did not.

Pointing out that the information disclosed in bankruptcy filings makes it difficult to do a large-scale analysis of causes rooted in medical debt and insurance, the Colorado researchers turned to a sample of 12,686 individuals that the U.S. Bureau of Labor Statistics has surveyed since 1997, when the respondents were between 14 and 22 years old. Just under 8,000 of those offered information about bankruptcies in their responses.

“The ACA did reduce the percentage of individuals who had either no health insurance or intermittent coverage,” the study found, referring to the 2010 law that provided incentives for expanding Medicaid coverage, established marketplaces for subsidized insurance, and outlawed the denial of coverage based on so-called pre-existing conditions. “Second, and quite significantly, the association between intermittent coverage as a predictor for filing a bankruptcy petition in the pre-ACA waves is no longer statistically significant post-ACA.”

Although bankruptcies increased during the recession for all groups, the authors found that not having any insurance did not predict the likelihood of bankruptcies to a significant degree. People with full insurance coverage had a slightly elevated risk of bankruptcy during the recession relative to the other demographics. But people who “churned” off and on of insurance, however, saw a dramatically increased risk of bankruptcy during the recession.

While they did not provide a reason for why the loss and gain of insurance coverage carried less bankruptcy risk for that intermittent group in the years after 2010, the researchers suggested that shorter periods without insurance coverage, lower rates of people reporting that they struggle to pay medical bills, and better access to health insurance all played a role. 

“Findings that the ACA has a positive impact on peoples’ finances and reduces the risk of filing for bankruptcy is incredibly important to know, particularly since much of the political wind continues to try to dismantle the ACA,” they concluded.

The study will be published in the Brooklyn Law Review.