- In a sweeping study of millions of households, researchers found that people were more likely to sign up for health insurance once prodded to obtain coverage after receiving a reminder letter from the IRS, according to the latest study in the National Bureau of Economic Research.
- The study also found that the uptick in coverage led to reduced mortality for middle-aged adults, or those 45 to 65, during the two years after receiving the letter. There is no evidence that coverage reduced mortality among children or young adults.
- The researchers claim this is the first study to provide experimental evidence that shows health insurance does reduce mortality.
The study shows that with a simple nudge in the form of a letter, people were more likely to obtain coverage, which highlights the positive effect outreach can have on increasing insurance enrollment. About 3.5 million households received the IRS letter in 2017 (when the Affordable Care Act's individual mandate penalty was still a factor), just two weeks before the close of open enrollment.
This new evidence raises questions about the wisdom to cut outreach efforts. President Donald Trump's administration previously has slashed advertisement and outreach budgets that were meant to spur enrollment in health insurance coverage through the ACA exchanges.
But there is no longer a financial penalty for failing to obtain insurance coverage, which may undercut outreach efforts to promote sign ups. The study also raises questions about whether the mandate should be re-examined as the 3.5 million households that received a letter pushing them to sign up for coverage came because they had previously received a financial penalty for failing to obtain coverage, according to the study.
The researchers note "some have suggested that the dollar value of the federal mandate penalty may have been too small to influence behavior; our coverage results provide evidence against that view, at least with respect to the 2017 federal penalty."
Researchers have long been trying to prove whether insurance coverage reduces the number of deaths in a population. "Although this question is among the most widely studied question in health economics, it is notoriously difficult to answer in credible ways," according to the report.
The study examines 4.5 million households that met the criteria to receive a letter from the IRS and 3.9 million households were randomly selected to receive the letter prodding them to obtain coverage (either through Medicaid or the exchanges).
With a control group, the researchers were able to study the effects the letter had on behavior and ultimately mortality.
In the two years following the intervention, the rate of mortality among previously uninsured 45- to 64-year-olds was lower in the treatment group than in the control by about 0.06 percentage points, or one fewer death for every 1,648 people in the population receiving letter, they found.
This study stands apart from prior research that relied on control groups that were not random.
"Because it’s entirely random in our study, any difference in coverage or mortality is because of the thing that is randomly varying [which is whether someone received a letter], Jacob Goldin, one of the three co-authors, told Healthcare Dive.