Barriers to Enrolling in Health Insurance: Estimates on the Value of Time

This paper evaluates a randomized field experiment that eased the enrollment process into a new public health insurance product among 817 informal sector workers in Managua, Nicaragua. The study randomly selected a subset of workers and offered to let them enroll at their place of business. In addition, the study also randomly varied the health insurance premium through a subsidy, allowing us to compare the demand increase from the price reduction with the demand increase from improved convenience. We find more convenient enrollment dramatically increased enrollment by 24 percentage points, roughly equivalent in magnitude to a 6-month subsidy worth approximately $100. We find that microentrepreneurs who work more hours, and who have higher opportunity costs of enrolling are particularly likely to sign up at their place of business. We provide additional survey data documenting that time and effort costs associated with enrollment are substantial barriers to health insurance enrollment. These results have important implications for initiatives designed to promote health insurance enrollment.