Financial transaction costs reduce benefit take-up evidence from zero-premium health insurance plans in Colorado.
With the passage of the American Recovery Plan Act of 2021, roughly 12 million Americans are eligible to purchase zero-premium Health Insurance Marketplace plans. Millions more are eligible for generously subsidized health plans with small, positive premiums. What difference does a premium of zero make, relative to a slightly positive premium? Using a regression discontinuity design and administrative data from Colorado, we find that zero-premium plans increase coverage, primarily by helping low-income households begin coverage sooner. The main mechanism is eliminating the transaction costs of having to make on-time payments to begin coverage. Transaction costs may be a meaningful barrier to subsidized insurance coverage take-up, particularly for low-income families.
Duke Scholars
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Related Subject Headings
- United States
- Patient Protection and Affordable Care Act
- Insurance, Health
- Insurance Coverage
- Humans
- Health Policy & Services
- Health Insurance Exchanges
- Colorado
- 4407 Policy and administration
- 3801 Applied economics
Citation
Published In
DOI
EISSN
ISSN
Publication Date
Volume
Start / End Page
Related Subject Headings
- United States
- Patient Protection and Affordable Care Act
- Insurance, Health
- Insurance Coverage
- Humans
- Health Policy & Services
- Health Insurance Exchanges
- Colorado
- 4407 Policy and administration
- 3801 Applied economics