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Asset Building Financial Inclusion Report

The Effect of Health Insurance on Savings Outcomes in Individual Development Accounts

By CSD • July 1, 2005October 31, 2018

This practicum explores the role of health insurance coverage for Individual Development Account (IDA) participants. Health insurance operates as a significant mediator for savings and asset accumulation, increasing the likelihood of success by 10% to 20% depending on the savings outcome and altering the likelihood of success by 26% to 75% depending on the outcome for certain participant sub-groups. Specifically, participants with health insurance are more likely to be savers (save $100 or more); make higher average monthly net deposits and cumulative deposits throughout program participation; are less likely to drop out of the IDA program prior to making a matched withdrawal; and more likely to make an asset purchase with their IDA savings and matching funds. In addition, medical debt is a savings barrier for IDA participants and has a statistically significant detrimental effect on each of six IDA savings outcomes, decreasing the likelihood of success by 11% to 34% depending on the outcome. Both IDA program administrators and policymakers can use these findings to improve and expand upon the current IDA policy model and ensure participant success.

Project: American Dream Policy Demonstration (ADD)

Citation

Banov, R. (2005). The effect of health insurance on savings outcomes in Individual Development Accounts (CSD  Report No. 05-29).  St. Louis, MO: Washington University, Center for Social Development.

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2005American Dream Policy Demonstration (ADD)individual development account (ida)rachel banov

Center for Social Development

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