Effect of Email Nudges on Plan Switching and Healthcare Utilization Among Unemployment Insurance Recipients

In March 2021, President Biden signed into law the American Rescue Plan Act of 2021 (ARP), a landmark federal economic relief and stimulus package designed to provide support to Americans hit by the economic recession brought about by the COVID-19 global pandemic. The law provides increased federal premium tax credits (PTC), and ensures that consumers will pay no more than 8.5 percent of household income on health insurance premiums in 2021 and 2022, if enrolled through an Affordable Care Act marketplace like Covered California.

The ARP also provides additional PTC and cost-sharing reduction (CSR) benefits to eligible marketplace enrollees who report receiving unemployment insurance benefits (UIB) for at least one week in 2021. Under the law, for 2021 only, Covered California consumers will have their household income level treated as if it were at 138.1 percent of the federal poverty level (FPL), regardless of their projected annual income, which will make them eligible for a Silver 94 plan, and which offers the greatest value on cost-sharing benefits.

But in order to access those cost-sharing benefits, households must be in silver tier plans, but over 40,000 were not. This project's goal is to assess the effects of an informational email on plan switching into Cost Sharing Reduction Silver plans and downstream healthcare utilization.

The project's research design is a randomized intervention among approximately 42,500 enrolled households with an email address in non-silver tier plans. The investigators randomly assigned to either two informational emails or to a no email control group. The investigators then collected administrative data to examine plan switching behavior and healthcare utilization among households in the study.