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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, RSBY. We find roughly 60% uptake even when consumers were charged premiums equal to the government’s cost 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, 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 INR 500-1000 rather than a zero premium to maximize the marginal value of public funds.
Authors
Anup Malani
Cynthia Kinnan
Research Fellow University College London
Gabriella is a Research Fellow of the IFS and a Professor of Economics in the Department of Economics and in the Department of Social Science at UCL.
Kosuke Imai
Morgen Miller
Shailender Swaminathan
University of Chicago
Bartek Woda
Economist Amazon
Working Paper details
- DOI
- 10.1920/wp.ifs.2024.0424
- Publisher
- Institute for Fiscal Studies
Suggested citation
Conti, G et al. (2024). Evaluating pricing health insurance in lower-income countries: A field experiment in India. 24/04. London: Institute for Fiscal Studies. Available at: https://ifs.org.uk/publications/evaluating-pricing-health-insurance-lower-income-countries-field-experiment-india (accessed: 18 May 2024).
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