Full Citation

Title: The Role of Behavioral Frictions in Health Insurance Marketplace Enrollment and Risk: Evidence from a Field Experiment

Citation Type: Working Paper

Publication Year: 2019

ISBN:

ISSN:

DOI: 10.3386/w26153

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Abstract: We experimentally varied information mailed to 87,000 households in California's health insurance marketplace to study the role of frictions in insurance take-up. Reminders about the enrollment deadline raised enrollment by 1.3 pp (16 percent), in this typically low take-up population. Heterogeneous effects of personalized subsidy information indicate systematic misperceptions about program benefits. Consistent with an adverse selection model with frictional enrollment costs, the intervention lowered average spending risk by 5.1 percent, implying that marginal respondents were 37 percent less costly than inframarginal consumers. We observe the largest positive selection among low income consumers, who exhibit the largest frictions in enrollment. Finally, the intervention raised average consumer WTP for insurance by $25 to $54 per month. These results suggest that frictions may partially explain low measured WTP for marketplace insurance, and that interventions reducing them can improve enrollment and market risk in exchanges.

Url: https://www.nber.org/papers/w26153

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Authors: Domurat, Richard; Menashe, Isaac; Yin, Wesley

Series Title: NBER Working Paper Series

Publication Number: 26153

Institution: NBER

Pages: 42

Publisher Location:

Data Collections: IPUMS USA

Topics: Population Health and Health Systems

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