Understanding the Propensity for Individuals to Remain Underinsured for Health in the United States: Avoidance versus Inattention

In the United States, a significant number of adults are uninsured for medical care. There are likely inefficiencies that arise from people not insuring, both in the form of higher mortality as well as uncompensated care costs to providers. In light of all the evidence supporting the take-up of more generous health insurance plans, it remains an open question as to why individuals still appear to underinsure for medical care by taking out no insurance or enrolling in plans with high out of pocket costs. I seek to investigate these patterns. Do individuals underinsure for medical care because they are inattentive to or even unaware about underlying health risks of mortality and illness because such information can be inaccessible or costly to obtain? Or, do they underinsure as a consequence of actively avoiding information about health risks?

Relying on existing observational data cannot allow us to disentangle information avoiders from non-avoiders, nor does it allow us to understand what form of information interventions are more effective in incentivizing attention. I design an experimental study that does both. Specifically, my study allows me to provide novel insights into (a) descriptive characteristics about who information avoiders are, (b) the impact of randomly assigning individuals to two potential treatment groups (low health salience versus high health salience) on the level of risk aversion individuals appear to display when they select for plans, and (c) treatment effect heterogeneity across characteristics including baseline knowledge, learning, and avoider-``types''.