@workingpaper {670034, title = {Do Ordeals Work for Selection Markets? Evidence from Health Insurance Auto-Enrollment}, year = {Working Paper}, note = { Revise \& Resubmit, American Economic Review(Previously circulated as "Reducing Ordeals through Automatic Enrollment")Coverage: HKS Insights }, abstract = {Are application hassles, or {\textquotedblleft}ordeals,{\textquotedblright} an effective way to limit public program enrollment? We provide new evidence by studying (removal of) an auto-enrollment policy for health insurance, adding an extra step to enroll. This minor ordeal has a major impact, reducing enrollment by 33\% and differentially excluding young, healthy, and economically disadvantaged people. Using a simple model, we show that adverse selection {\textendash} a classic feature of insurance markets {\textendash} undermines ordeals{\textquoteright} standard rationale of excluding low-value individuals, since they are also low-cost and may not be inefficient. Our analysis illustrates why ordeals targeting is unlikely to work well in selection markets.}, url = {https://www.nber.org/papers/w30781}, author = {Mark Shepard and Myles Wagner} }