Southern Perversity: The Affordable Care Act and Home Foreclosure

• In Event: 2161 - Health, Inequality, and the Affordable Care Act

Abstract

Alabama was one of 17 U.S. states that opted out of Medicaid Expansion under the Patient Care and Affordable Care Act of 2010 (“ACA”). The governor’s rationale for this decision was that the ACA would deplete state budgets and entrap citizens in a spider’s web of dependency. In this paper, we deploy perversity theory (Hirschman’s (1991) to analyze neoliberal opposition to the ACA and to examine access to health subsidies through federal exchanges in a non-Expansion state. From 2013-2018, we collected data on home foreclosures, which typically involve a great deal of debt among people who are eligible for subsidies, and matched these records with court judgments on the foreclosees' medical/non-medical debt over thirty years (1988-2018). We then conducted cross-sectional and longitudinal analyses of the 2,434 foreclosures that we collected for the study. The cross-sectional analysis showed that both foreclosure and debt activity had declined by the end of the study. Notably, medical debt dropped dramatically once the ACA exchanges came on line, so that only one foreclosee had a record of medical debt by 2018. The longitudinal analysis showed that non-medical debt peaked during the Great Recession of 2007-2011 and remained at a higher level than in 1988. By contrast, medical debt peaked in 2012-2014 and then declined to the lowest point in 30 years. We conclude that, rather than the ACA doing more harm than good (the perversity thesis), relief from medical debt has lessened the risk of foreclosure among many ACA-eligible homeowners in Alabama. Since African American foreclosees were almost twice as likely to have medical debt, and to experience relief after 2014, the ACA also contributed to a more equitable and positive outcome despite state leaders’ dire predictions about the bondage of dependency under the federal yoke.

Authors

• Bronwen Lichtenstein, University of Alabama

• Joe Weber, University of Alabama