Can Automatic Retention Improve Health Insurance Market Outcomes? / Adrianna L. McIntyre, Mark Shepard, Myles Wagner.

Format:

Book

Author/Creator:

McIntyre, Adrianna L.

Contributor:

National Bureau of Economic Research.

Shepard, Mark.

Wagner, Myles.

Series:

Working Paper Series (National Bureau of Economic Research) no. w28630.

NBER working paper series no. w28630

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2021.

Summary:

There is growing interest in market design using default rules and other choice architecture principles to steer consumers toward desirable outcomes. Using data from Massachusetts' health insurance exchange, we study an "automatic retention" policy intended to prevent coverage interruptions among low-income enrollees. Rather than disenroll people who lapse in paying premiums, the policy automatically switches them to an available free plan until they actively cancel or lose eligibility. We find that automatic retention has a sizable impact, switching 14% of consumers annually and differentially retaining healthy, low-cost individuals. The results illustrate the power of defaults to shape insurance coverage outcomes.

Notes:

Print version record

April 2021.