Copays, Selection, and Impact: Experimental Evidence on Health Insurance in Uganda" with Kim Cramer and Jack Willis

Abstract:

Designing health insurance requires setting multiple contract terms, such as premiums and copays. While tradeoffs across these terms are likely to be especially important for low-income households in developing countries, most existing evidence comes from high-income settings. In a randomized controlled trial with a health insurance provider and 3,000 households in rural Uganda, we measure the demand for and effects of health insurance, and how these vary with the level of the copay. Combining survey data with administrative data from healthcare providers, the experimental design identifies impacts on healthcare use, health, and financial outcomes, as well as selection and moral hazard. It further allows us to simulate outcomes non-parametrically under a rich set of contract structures, highlighting the tradeoffs between premiums and copays for both consumers and providers.