Massachusettss 2006 health-care reform law, which was similar in many respects to the 2010 federal Affordable Care Act, helped improve the financial health of Bay State residents, according to new research from the Federal Reserve Bank of Chicago.

We find that the Massachusetts reform improved financial outcomes across many dimensions: it improved credit scores, reduced delinquencies, lowered the fraction of debt past due, and reduced the incidence of personal bankruptcy, wrote Chicago Fed senior economist Bhashkar Mazumder and University of Notre Dame assistant professor Sarah Miller in a recent working paper.

The 2006 law sometimes called Romneycare after then-Gov. Mitt Romney required residents to buy health insurance, expanded the Massachusetts Medicaid program and mandated many employers offer coverage to their workers. Mr. Mazumder and Ms. Miller, among others, describe it as a model for the controversial 2010 federal law, often called Obamacare after President Barack Obama.

The economists analyzed credit-report data for Massachusetts residents from the Federal Reserve Bank of New Yorks Consumer Credit Panel dataset. The 2006 law, they found, had a number of significant effects: credit scores rose, delinquent debt fell and bankruptcies became less likely. The probability of a person having more than $10,000 in delinquent debt fell by about 21% and the chances of having $5,001 to $10,000 past due fell by about 10%.

The effects of the reform on credit score, personal bankruptcy, and delinquency are most pronounced for those whose credit scores were lower before the reform, but those with higher credit scores (and therefore, better access to credit), experienced a larger relative decline in total debt, they wrote.

The bottom line, according to Mr. Mazumder and Ms. Miller, is that the implications of healthcare reform extend into credit markets and household balance sheets. These results show that health care reform legislation has a strong effect not just on health and the use of health services, but across many measures of household well-being, they wrote.

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Massachusetts Health-Care Law Improved States Finances, Chicago Fed Reports