Effect of Health Insurance in India: A Randomized Controlled Trial
We report on a large randomized controlled trial of hospital insurance for above-poverty-line Indian households. Households were assigned to free insurance, sale of insurance, sale plus cash transfer, or control. To estimate spillovers, the fraction of households offered insurance varied across villages. The opportunity to purchase insurance led to 59.91% uptake and access to free insurance to 78.71% uptake. Access increased insurance utilization. Positive spillover effects on utilization suggest learning from peers. Many beneficiaries were unable to use insurance, demonstrating hurdles to expanding access via insurance. Across a range of health measures, we estimate no significant impacts on health.
We thank Kate Baicker, Amitabh Chandra, Pascaline Dupas, Johannes Haushofer, Rick Hornbeck, Joe Newhouse, Neale Mahoney, Julian Reif, Joshua Gottlieb, and seminar participants at Brown University, University of Chicago, Harvard, and Stanford for comments. This study was funded by the Department for International Development in the UK Government; the Tata Trusts through the Tata Centre for Development at the University of Chicago; the MacLean Center, the Becker-Friedman Institute, the Neubauer Collegium, and the Law School at the University of Chicago; the Sloan Foundation; SRM University; and the International Growth Centre. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.