TY  - JOUR
AU  - Domurat, Richard
AU  - Menashe, Isaac
AU  - Yin, Wesley
TI  - The Role of Behavioral Frictions in Health Insurance Marketplace Enrollment and Risk: Evidence from a Field Experiment
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 26153
PY  - 2019
Y2  - August 2019
DO  - 10.3386/w26153
UR  - http://www.nber.org/papers/w26153
L1  - http://www.nber.org/papers/w26153.pdf
N1  - Author contact info:
Richard Domurat
University of California at Los Angeles
3250 Public Affairs Building
Los Angeles, CA 90095
E-Mail: Richard.domurat@ucla.edu

Isaac Menashe
Covered California
1601 Exposition Boulevard
Sacramento, CA 95815
E-Mail: Isaac.Menashe@covered.ca.gov

Wesley Yin
University of California, Los Angeles
3250 Public Affairs Building
Los Angeles, CA 90095
Tel: 301-928-4308
E-Mail: wyin@ucla.edu
M3  - presented at "Health Care Program Meeting", December 6, 2019
AB  - 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.
ER  -