Financial Effects of California’s Fair Pricing Law on Medical Debt and Credit Outcomes

This study analyzes the financial effects of the 2007 California Fair Pricing Law, which limits hospital charges for low-income and financially vulnerable patients. The authors use differences in exposure to the policy across counties, measured by uninsured rates, to evaluate its impact on personal financial outcomes.

The findings show that the law reduces the probability of individuals having non-medical debt sent to collections, as well as the number of non-medical collection accounts. There is also evidence that credit scores improve in areas more affected by the policy, along with suggestive signs of fewer delinquent accounts among residents in those counties.

Overall, the results indicate that hospital billing regulations can meaningfully improve the financial well-being of vulnerable populations by reducing medical-related financial distress and its spillover effects on credit and debt outcomes.

Antwi, Y. A., Aouad, M., & Blascak, N. E. (2026). Hospital billing regulations and financial well-being: Evidence from California’s Fair Pricing Law (NBER Working Paper No. 35080). National Bureau of Economic Research. https://www.nber.org/papers/w35080