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Dean Yang, Taken by Storm

Rebecca L. Thornton photo

Social security health insurance for the informal sector in Nicaragua: a randomized evaluation

Publication Abstract

Thornton, Rebecca L., Laurel E. Hatt, Erica M. Field, Mursaleena Islam, Freddy Solis Diaz, and Martha Azucena Gonzalez. 2010. "Social security health insurance for the informal sector in Nicaragua: a randomized evaluation." Health Economics, 19(Suppl. 1): 181-206.

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 (C) 2010 John Wiley & Sons, Ltd.

DOI:10.1002/hec.1635 (Full Text)

Country of focus: Nicaragua.

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