The study’s researchers were led by Heidi Allen, PhD, a professor at New York City-based Columbia University. The study took data from 2009-2013 and focused on early Medicaid expansion in California counties in 2011-2012 compared to other counties nationwide. Researchers found that early Medicaid expansion was associated with an 11 percent decrease in payday loans taken out each month. Payday loans are high-interest loans utilized mostly by lower and middle-class Americans, the same general group to benefit from Medicaid expansion.
“We were unable to determine precisely how and for whom the expansion reduced payday borrowing, since to our knowledge, no data exist that directly link payday lending to insurance status. Nonetheless, our results suggest that Medicaid reduced the demand for high-interest loans and improved the financial health of American families,” wrote the study’s authors.
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