Global Health Seminar - Adverse Selection in (Un)Subsidized Health Insurance: Evidence from Nepal's Age-70 Threshold

Event details

Abstract

I study adverse selection in Nepal's National Health Insurance Program using a regression discontinuity design around the age-70 threshold, where premiums are waived and coverage switches from household to individual. Claims per enrollee drop sharply: the probability of any claim falls by 7.6 percentage points (15\%), total claimed amounts decline by NPR~1,013 (19\%), and the number of claims decreases by 0.51 (20\%). An expected cost index constructed from exogenous enrollment-time characteristics drops discontinuously at the threshold, confirming that the composition of enrollees shifts toward healthier individuals. A pre-policy placebo and an event study validate that the pattern is policy-induced. Welfare analysis yields a marginal value of public funds of 0.60 for new enrollees drawn in by the subsidy, with the subsidy correcting underinsurance for small households but generating overinsurance for large ones. These findings demonstrate that adverse selection persists despite household-level bundling and enrollment timing restrictions.

Zoom link.

If you are not a member of University of York staff and are interested in attending a seminar, please contact akseer.hussain@york.ac.uk so that you can be added to the mailing list.