Randomized Evaluation of a Program Extending Social Security Health Insurance to Informal Workers via MFIS in Nicaragua

Mursaleena Islam, Abt Associates Inc.
Barbara Magnoni, EA Consultants
Laurel E. Hatt, Abt Associates Inc.

We evaluate whether marketing the Nicaraguan Social Security Institute’s (INSS’s) health insurance program through microfinance institutions (MFIs) increased uptake among informal workers, and measure the impact of insurance on their healthcare utilization and expenditures. A baseline and follow-up survey were conducted with 2,610 market vendors in Managua. 1,386 vendors were randomized to receive six months of free insurance. Two-stage least squares regression was used to measure the impact of insurance on key outcomes. Overall, allowing workers to sign up at MFIs did not increase enrollment rates. Controlling for selection bias, there was no net increase in health care utilization, including reproductive health services. Enrollees switched away from government health centers and private hospitals into INSS-contracted clinics. Total health expenditures for insurees decreased, especially for those with chronic illnesses. Non-monetary costs were substantial enrollment barriers; policy-makers need to develop more effective approaches for encouraging vulnerable groups to voluntarily enroll in insurance.