Health Insurance Literacy and Health Insurance Choices: Evidence from Affordable Care Act Navigator Programs

Health Insurance Literacy and Health Insurance Choices: Evidence from Affordable Care Act Navigator Programs

Rebecca Myerson

Conference paper

7th Conference of the American Society of Health Economists

2018

Consumers frequently make poor choices related to health insurance, such as signing up for dominated plans (in which they pay more for equivalent or worse coverage) or failing to enroll in Medicaid (which provides coverage free of charge). Billions of dollars of federal funding were spent on programs to help consumers understand their health insurance options and enroll in health insurance after the Affordable Care Act, but little is known about the effects of these programs. In particular, economists may worry that these programs could exacerbate adverse selection in private markets if they mainly helped high-cost patients self-select into insurance. Using data on the differential patterns of funding of navigator programs across states and over time, I show that generous navigator programs were associated with increased insurance uptake but similar or decreased spending per insured patient. To explain this lack of adverse selection, I use two additional national data sets to show that patients with low health insurance literacy report higher barriers to care than other patients, including barriers to using their insurance once insured. ∗University of Southern California.