The Role of Behavioral Frictions in Health Insurance Marketplace Enrollment and Risk: Evidence from a Field Experiment

We experimentally varied information mailed to 87,000 households in California’s health insurance marketplace study the role of frictions take-up. Reminders about enrollment deadline raised by 1.3 pp (16 percent) this typically low take-up population. Heterogeneous effects personalized subsidy indicate misperceptions program benefits. Consistent with an adverse selection model frictional costs, intervention lowered average spending risk 5.1 percent, implying that marginal respondents were 37 percent less costly than inframarginal consumers. observe largest positive among income consumers, who exhibit enrollment. Finally, we estimate implied value letter be $25 $53 per month dollars. These results suggest may partially explain for insurance, and interventions reducing them can improve market exchanges. (JEL C93, G22, G52, H75, I13)