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Using Email And Letters To Reduce Choice Errors Among ACA Marketplace Enrollees
1Andrew Feher (andrew.feher@covered.ca.gov) is a senior researcher at Covered California, in Sacramento, California.
Health Affairs (Project Hope)
|May 3, 2021
Summary
Low-income households can save money on health insurance by switching to more affordable plans. Targeted email and postal messages effectively reduced enrollment errors in California's Affordable Care Act Marketplace.
Area of Science:
- Health economics
- Behavioral economics
- Public health policy
Background:
- Many low-income households eligible for cost-sharing reduction (CSR) silver plans in California's Affordable Care Act (ACA) Marketplace mistakenly enroll in more expensive gold or platinum plans.
- These enrollment errors result in higher healthcare costs for consumers and suboptimal coverage.
- Understanding factors influencing consumer choice is crucial for improving health insurance access and affordability.
Purpose of the Study:
- To evaluate the effectiveness of email and postal messaging interventions in reducing choice errors among low-income ACA Marketplace enrollees.
- To determine the impact of these interventions on enrollment in cost-sharing reduction (CSR) silver plans.
- To quantify the financial benefits for consumers who switch to more appropriate plans.
Main Methods:
- A randomized controlled trial was conducted during the 2019 ACA open enrollment period in California.
- Participants were assigned to a control group, an email-only intervention group, or a mail-plus-email intervention group.
- The study tracked plan selection, focusing on transitions to CSR silver plans and associated costs.
Main Results:
- The email-only intervention increased switching to CSR silver plans by 2 percentage points (11% increase) compared to the control group.
- The mail-plus-email intervention increased switching to CSR silver plans by 3.9 percentage points (22% increase), significantly improving enrollment across subpopulations.
- Consumers switching from erroneous plans saved an average of $84/month in premiums and $56/month in out-of-pocket expenses.
Conclusions:
- Low-cost behavioral nudges, particularly combined email and postal messages, are effective in helping low-income individuals rectify health insurance choice errors.
- These interventions lead to more affordable and generous coverage, demonstrating the potential for significant cost savings for enrollees.
- The findings support the use of targeted communication strategies to improve enrollment outcomes in health insurance marketplaces.
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