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Extending health insurance to the informal sector through microfinance in Nicaragua
Last registered on January 21, 2015

Pre-Trial

Trial Information
General Information
Title
Extending health insurance to the informal sector through microfinance in Nicaragua
RCT ID
AEARCTR-0000585
Initial registration date
January 21, 2015
Last updated
January 21, 2015 2:08 PM EST
Location(s)
Primary Investigator
Affiliation
University of Illinois at Urbana-Champaign
Other Primary Investigator(s)
PI Affiliation
ALVA Consultores, Managua, Nicaragua
PI Affiliation
ALVA Consultores, Managua, Nicaragua
PI Affiliation
PSP-One Project, Abt Associates Inc
PI Affiliation
Harvard University
PI Affiliation
PSP-One Project, Abt Associates Inc
Additional Trial Information
Status
Completed
Start date
2007-01-01
End date
2009-09-01
Secondary IDs
Abstract
This study presents the results from an experimental evaluation of a voluntary health insurance program for informal sector workers in Nicaragua. Costs of the premiums as well as enrollment location were randomly allocated. Overall, take-up of the program was low, with only 20% enrollment. Program costs and streamlined bureaucratic procedures were important determinants of enrollment. Participation of local microfinance institutions had a slight negative effect on enrollment. One year later, those who received insurance substituted toward services at covered facilities and total out-of-pocket expenditures fell. However, total expenditures fell by less than the insurance premiums. We find no evidence of an increase in health-care utilization among the newly insured. We also find very low retention rates after the expiration of the subsidy, with less than 10% of enrollees still enrolled after one year. To shed light on the findings from the experimental results, we present qualitative evidence of institutional and contextual factors that limited the success of this program.
External Link(s)
Registration Citation
Citation
Diaz, Freddy et al. 2015. "Extending health insurance to the informal sector through microfinance in Nicaragua." AEA RCT Registry. January 21. https://doi.org/10.1257/rct.585-1.0.
Former Citation
Diaz, Freddy et al. 2015. "Extending health insurance to the informal sector through microfinance in Nicaragua." AEA RCT Registry. January 21. https://www.socialscienceregistry.org/trials/585/history/3416.
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Experimental Details
Interventions
Intervention(s)
In January 2007, the government of Nicaragua initiated a pilot program that extended the Nicaraguan Social Security Institute’s (INSS’s) health insurance program, which was previously only for formal sector employees, to informal sector workers. The coverage and cost of the program were designed to be as similar as possible to those associated with the program for workers employed in the formal sector. For a flat monthly fee, individuals in the informal sector gained access to a wide range of services with zero co-payment. The cost of the program was structured such that the monthly fee was higher in the first two months, at approximately US$18 per month, and then fell to approximately US$15 per month in subsequent months. The health insurance covered enrolled individuals and dependents under the age of twelve.

This evaluation attempted to measure the determinants of insurance enrollment as well as the impacts of having insurance for informal sector workers by randomly varying the costs and convenience of signing up for INSS health insurance. Individuals were assigned to purchase the insurance at either the INSS central office or the branch office of three participating MFIs: ACODEP, Banco ProCredit, and Findesa.
Between March and June 2007, a few months after the INSS insurance program was rolled out to informal sector workers, a baseline survey was administered to a representative sample of vendors in the three largest open-air markets in central Managua. At the end of the baseline survey, respondents were invited to choose a lottery ticket out of a stack of unmarked, pre-sealed envelopes. The possible lottery prizes included a blank ticket (no prize); an INSS brochure detailing the insurance product; a brochure accompanied by a 6-month insurance subsidy with instructions to sign up at the INSS office; or a brochure accompanied by a 6-month insurance subsidy with instructions to sign up at an MFI office. The 6-month subsidy was worth approximately US$96 and was provided in the form of a voucher; respondents were told that payments would be made on their behalf directly to the INSS. After one year, respondents were then approached for a follow-up survey to measure changes in health and healthcare utilization.
Intervention Start Date
2007-03-01
Intervention End Date
2008-10-31
Primary Outcomes
Primary Outcomes (end points)
Take-up of insurance; Impact on utilization and expenditures; Retention.
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
To measure the determinants of insurance enrollment as well as the causal effects of having insurance, we implemented an evaluation that randomly varied the costs (financial, informational, and convenience) of signing up for health insurance for each individual. Data collection involved a baseline and one-year follow-up survey of a sample of eligible participants in addition to consolidated administrative data on insurance affiliation from INSS. The baseline survey collected information in two rounds on demographic characteristics, prior and current health services utilization, socioeconomic characteristics, and health-care expenditures. Government ID numbers were collected to match respondents to health insurance enrollment data subsequently provided by the government. For the follow-up survey, 2807 respondents were approached, and 2610 (93%) were successfully re-interviewed. Our analysis is restricted to the respondents who completed interviews at both baseline and follow-up and had valid voucher data.
Experimental Design Details
Randomization Method
Participants were invited to choose a lottery ticket out of a stack of unmarked, pre-sealed envelopes.
Randomization Unit
Individual
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
2,807 respondents
Sample size: planned number of observations
2,807 respondents
Sample size (or number of clusters) by treatment arms
Pure Control: 119 respondents
Treatment groups:
- Informational brochure only: 1,200 respondents
- Six-month subsidy, enroll at INSS: 758 respondents
- Six-month subsidy, enroll at MFI: 730 respondents
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
Health Sciences Institutional Review Board
IRB Approval Date
2007-05-20
IRB Approval Number
HUM00012207
Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
Yes
Intervention Completion Date
October 31, 2008, 12:00 AM +00:00
Is data collection complete?
Yes
Data Collection Completion Date
Final Sample Size: Number of Clusters (Unit of Randomization)
2807 individuals approached, while 2610 (93%) completed the follow-up survey
Was attrition correlated with treatment status?
Yes
Final Sample Size: Total Number of Observations
2807 respondents were approached for the follow-up survey, and 2610 (93%) were successfully re-interviewed.
Final Sample Size (or Number of Clusters) by Treatment Arms
Moved/Temporarily away: 26 (1%); Deceased, Hospitalized, Other: 19 (0.7%); Refused: 152 (5%); Completed: 2610 (93%); Total Approached: 2807
Data Publication
Data Publication
Is public data available?
No
Program Files
Program Files
Reports and Papers
Preliminary Reports
Relevant Papers
Abstract
This article presents the results from an experimental evaluation of a voluntary health insurance program for informal sector workers in Nicaragua. Costs of the premiums as well as enrollment location were randomly allocated. Overall, take-up of the program was low, with only 20% enrollment. Program costs and streamlined bureaucratic procedures were important determinants of enrollment. Participation of local microfinance institutions had a slight negative effect on enrollment. One year later, those who received insurance substituted toward services at covered facilities and total out-of-pocket expenditures fell. However, total expenditures fell by less than the insurance premiums. We find no evidence of an increase in health-care utilization among the newly insured. We also find very low retention rates after the expiration of the subsidy, with less than 10% of enrollees still enrolled after one year. To shed light on the findings from the experimental results, we present qualitative evidence of institutional and contextual factors that limited the success of this program. Copyright 2010 John Wiley & Sons, Ltd.
Citation
Health Econ. 19: 181–206 (2010) Published online 30 June 2010 in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/hec.1635