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The challenges of universal health insurance in developing countries : Evidence from a large-scale randomized experiment in Indonesia

Author

Listed:
  • Banerjee, Abhijit

    (MIT)

  • Finkelstein, Amy

    (MIT)

  • Hanna, Rema

    (Harvard University)

  • Olken, Benjamin

    (MIT)

  • Ornaghi, Arianna

    (University of Warwick)

  • Sumarto, Sudarno

    (TNP2K and SMERU)

Abstract

To assess ways to achieve widespread health insurance coverage with financial solvency in developing countries, we designed a randomized experiment involving almost 6,000 households in Indonesia who are subject to a nationally mandated government health insurance program. We assessed several interventions that simple theory and prior evidence suggest could increase coverage and reduce adverse selection : substantial temporary price subsidies (which had to be activated within a limited time window and lasted for only a year), assisted registration, and information. Both temporary subsidies and assisted registration increased initial enrollment. Temporary subsidies attracted lowercost enrollees, in part by eliminating the practice observed in the no subsidy group of strategically timing coverage for a few months during health emergencies. As a result, while subsidies were in effect, they increased coverage more than eightfold, at no higher unit cost ; even after the subsidies ended, coverage remained twice as high, again at no higher unit cost. However, the most intensive (and effective) intervention – assisted registration and a full one-year subsidy – resulted in only a 30 percent initial enrollment rate, underscoring the challenges to achieving widespread coverage

Suggested Citation

  • Banerjee, Abhijit & Finkelstein, Amy & Hanna, Rema & Olken, Benjamin & Ornaghi, Arianna & Sumarto, Sudarno, 2020. "The challenges of universal health insurance in developing countries : Evidence from a large-scale randomized experiment in Indonesia," CAGE Online Working Paper Series 454, Competitive Advantage in the Global Economy (CAGE).
  • Handle: RePEc:cge:wacage:454
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    References listed on IDEAS

    as
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Jason Shafrin’s journal round-up for 9th September 2019
      by Jason Shafrin in The Academic Health Economists' Blog on 2019-09-09 11:00:23

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    Cited by:

    1. Cai, J & de Janvry, A & Sadoulet, E, 2020. "Subsidy policies and insurance demand," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt5cc1b1fk, Department of Agricultural & Resource Economics, UC Berkeley.

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    More about this item

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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