Paul L. Caron
Dean



Monday, December 16, 2019

NY Times: The IRS Sent A Letter To 3.9 Million People. It Saved 700 Lives.

New York Times, The I.R.S. Sent a Letter to 3.9 Million People. It Saved Some of Their Lives.:

Three years ago, 3.9 million Americans received a plain-looking envelope from the Internal Revenue Service. Inside was a letter stating that they had recently paid a fine for not carrying health insurance and suggesting possible ways to enroll in coverage.

New research concludes that the bureaucratic mailing saved lives.

Three Treasury Department economists have published a working paper finding that these notices increased health insurance sign-ups [Jacob Goldin (Stanford), Ithai Z. Lurie (U.S. Treasury Department,  Office of Tax Analysis) & Janet McCubbin (U.S. Treasury Department,  Office of Tax Analysis), Health Insurance and Mortality: Experimental Evidence From Taxpayer Outreach]. Obtaining insurance, they say, reduced premature deaths by an amount that exceeded any of their expectations. Americans between 45 and 64 benefited the most: For every 1,648 who received a letter, one fewer death occurred than among those who hadn’t received a letter.

In all, the researchers estimated that the letters may have wound up saving 700 lives.

The experiment, an unintended result of a budget shortfall, is the first rigorous experiment to find that health coverage leads to fewer deaths, a claim that politicians and economists have fiercely debated in recent years as they assess the effects of the Affordable Care Act’s coverage expansion. The results also provide belated vindication for the much-despised individual mandate that was part of Obamacare until December 2017, when Congress did away with the fine for people who don’t carry health insurance. ...

The Obama administration had planned to send letters to all 4.5 million Americans paying tax fines for not carrying health coverage, only to learn the budget was not quite big enough. About 600,000 uninsured taxpayers were randomly left out of the mailing.

This created a randomized controlled trial, which researchers generally view as the gold standard for studying the results of a specific policy intervention — in this case, the effects of being nudged to get health coverage.

“I was definitely torn about it,” said Jacob Goldin, a co-author of the paper who worked as an economist at the Treasury Department and is now an associate professor at Stanford. “We were hoping the letters would be beneficial, and wanted them to go to everybody. But it was also an exciting research opportunity.” ...

The subsequent research, published by Mr. Goldin with the Treasury economists Ithai Lurie and Janet McCubbin, found that gaining coverage was associated with a 12 percent decline in mortality over the two-year study period (the first months of coverage seemed to be most important, presumably because people could get caught up on various appointments and treatments they might have been missing).

Months later, in August 2017, the Trump administration cut the health law’s outreach budget by 72 percent.

And at the end of 2017, Congress passed legislation eliminating the health law’s fines for not carrying health insurance, a change that probably guarantees that the I.R.S. letters will remain a one-time experiment.

https://taxprof.typepad.com/taxprof_blog/2019/12/ny-times-the-irs-sent-a-letter-to-39-million-people-it-saved-700-lives.html

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Comments

This is exciting because it is a relatively rare near perfect empirical study of an economic issue.

Posted by: Bill | Dec 16, 2019 12:34:12 PM

Meanwhile, over 1,000 veterans may have died during the in 2014 due to malpractice and lack of care due to fraud perpetrated by staff.

Posted by: MM | Dec 16, 2019 1:00:24 PM