The Effect of Behavioral Interventions on Enrollment and Adverse Selection in Health Insurance Marketplaces
Incomplete take-up of free and low-cost health insurance remains a puzzle. Failure to enroll in coverage has consequences for the uninsured as well as the health care providers and state budgets that bear the costs of uncompensated care. Moreover, if the marginal enrollee is healthier on average, increasing enrollment may improve competition and reduce premiums in the market by improving the risk pool. Research from other contexts suggests that behavioral frictions or mistakes may play an important role in determining whether households complete the enrollment process. Researchers will conduct a randomized trial to test “nudges” (letters sent by postal mail) that could increase enrollment in the Massachusetts Health Connector, the state marketplace through which eligible residents can obtain subsidized private coverage. Nudges will target households that were determined eligible for financial assistance but—for unknown reasons—failed to enroll in an insurance plan. Researchers will employ three treatment arms: a generic reminder letter, a personalized reminder letter, and a personalized reminder letter with a simplified (check-the-box) enrollment option. This will allow researchers to determine the mechanisms by which these nudges are (or aren’t) effective at (1) inducing enrollment among uninsured consumers and (2) shifting the risk pool.