Working Paper
Hospital Billing Regulations and Financial Well-Being: Evidence from California’s Fair Pricing Law
Abstract: We examine the financial consequences of the 2007 California Fair Pricing Law, which places a price ceiling on hospital bills for financially vulnerable individuals. Exploiting cross-sectional variation in exposure to the law, we estimate its impact on individual financial distress. We find that the law reduces the likelihood of incurring non-medical debt in collections by 19.8 percent and the number of non-medical collections by 39 percent for an individual living in a county with average exposure in California. In addition, we find suggestive evidence that the number of delinquent accounts decreased for exposed individuals. Our results suggest hospital billing regulations can improve targeted individuals’ financial outcomes.
JEL Classification: G51; I18; H75;
https://doi.org/10.21799/frbp.wp.2025.39
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File(s): File format is application/pdf https://www.philadelphiafed.org/-/media/FRBP/Assets/working-papers/2025/wp25-39.pdf
Bibliographic Information
Provider: Federal Reserve Bank of Philadelphia
Part of Series: Working Papers
Publication Date: 2025-12-04
Number: 25-39
Note: Supersedes Working Paper 23-20 – I've Got 99 Problems But a Bill Ain't One: Hospital Billing Caps and Financial Distress in California