Evaluating and Pricing Health Insurance in Lower-Income Countries: A Field Experiment in India

Anup Malani, Cynthia Kinnan, Gabriella Conti, Kosuke Imai, Morgen Miller, Shailender Swaminathan, Alessandra Voena and Bartek Woda

No 11006, CESifo Working Paper Series from CESifo

Abstract: Universal health coverage is a widely shared goal across lower-income countries. We conducted a large-scale, 4-year trial that randomized premiums and subsidies for India’s first national, public hospital insurance program, called RSBY. We find substantial demand (∼ 60% uptake) even when consumers were charged a price equal to the premium the government paid for insurance. We also find substantial adverse selection into insurance at positive prices. Insurance enrollment increases insurance utilization, partly due to spillovers from use of insurance by neighbors. However, healthcare utilization does not rise substantially, suggesting the primary benefit of insurance is financial. Many enrollees attempted to use insurance but failed, suggesting that learning is critical to the success of public insurance. We find very few statistically significant impacts of insurance access or enrollment on health. Because there is substantial willingness-to-pay for insurance, and given how distortionary it is to raise revenue in the Indian context, we calculate that our sample population should be charged a premium for RSBY between 67-95% of average costs (INR 528-1052, $30-60) rather than a zero premium to maximize the marginal value of public funds.

Keywords: health insurance; adverse selection; spillovers; marginal value of public funds (search for similar items in EconPapers)
JEL-codes: D10 I13 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Evaluating and pricing health insurance in lower-income countries: A field experiment in India (2024)
Working Paper: Evaluating and Pricing Health Insurance in Lower-Income Countries: A Field Experiment in India (2024)
Working Paper: Evaluating and Pricing Health Insurance in Lower-Income Countries: A Field Experiment in India (2024)
Working Paper: Evaluating and Pricing Health Insurance in Lower-income Countries: A Field Experiment in India (2024)
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