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Title: Reducing Ordeals through Automatic Enrollment: Evidence from a Health Insurance Exchange

Citation Type: Working Paper

Publication Year: 2021

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Abstract: How much do administrative hassles matter for health insurance take-up, and what are the implications for who gets covered? Studying low-income health insurance enrollment in Massachusetts, we find that a modest hassle-a requirement to actively choose a health plan to get enrolled-leads to major reductions in take-up. An auto-enrollment policy that removes this hassle increases take-up by 30-50% and differentially enrolls young, healthy, low-cost individuals with lower socioeconomic status. Applying the evidence to a model of public program targeting, we argue that the classic measure of favorable targeting-whether an ordeal screens out people who need or value a program less-misses the fact that low-value types often incur much lower costs. Relative to subsidies, auto-enrollment has similar targeting properties but is 36-125% more cost-effective by avoiding new spending on inframarginal enrollees.

Url: https://scholar.harvard.edu/files/mshepard/files/shepard_wagner_autoenrollment.pdf

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Authors: Shepard, Mark; Wagner, Myles

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Institution: Harvard Kennedy School

Pages: 1-61

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Data Collections: IPUMS USA

Topics: Health, Population Health and Health Systems

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