STICERD Industrial Organisation Seminars
What Prevents Health Insurance Take-up?: Quantifying Frictions and Policy Responses
Michael Whinston (Massachusetts Institute of Technology), joint with Soheil Ghili (Yale), Igal Hendel (Northwestern), and Michael Sullivan (University of British Columbia)
Monday 19 October 2026 16:00 - 17:30
SAL 3.05, 3rd Floor Conference Room, Sir Arthur Lewis Building, LSE, 32 Lincoln's Inn Fields, London WC2A 3PH
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About this event
Most consumers eligible for plans listed on Affordable Care Act (ACA) health insurance exchanges remained uninsured despite substantial premium subsidies and, historically, fines for lacking coverage. Several impediments, including adverse selection, informational frictions, uncompensated care, and hassle costs, could explain low participation. We use rich data on consumers' medical conditions, medical expenses by payer, and insurance status to estimate a model of exchange equilibrium to assess these impediments. We find that uncompensated care depresses take-up by more than adverse selection does, and by considerably more than informational frictions. Uncompensated care depresses consumers' willingness to pay for insurance to the extent that the exchange market fully unravels without premium subsidies.