Insurance without Commitment: Evidence from the ACA Marketplaces

People CRM


  1. Paper examines the US healthcare market after ACA and the incentives and implications of people using coverage for a few months and then drop out. It focuses on a four-year period after ACA and only for individual insurance customers.
  1. Concludes that imposing a penalty that incentivizes participation for at least 3.5 months would lower premium levels and improve overall consumer welfare.
    1. The counterintuitive conclusion is that “permitting drop-out can be beneficial even to full-year enrollees, and can raise overall welfare.”
  1. Traditional market discussion of welfare focuses on signups but does not adequately factor in length of time people stay in market.


  1. This seems very aligned with ID Studies’ emphasis — illustrates a counterintuitive concept (that dropouts can be beneficial to insurance markets) and derives a precise guideline at which that incentive is maximized.
  1. “incentive” mentioned only once, but “penalty” on 11 pages