Repeated experience suggests that simple referrals may enroll no more than a minority of eligible consumers into benefits for which they qualify. For example, two randomized, controlled experiments analyzed H&R Block’s efforts to help taxpayers obtain various forms of assistance:
- When H&R Block used tax return data and interviews to complete and file SNAP application forms on behalf of families, the number of applications for aid was 80 percent higher than with the control group that received no assistance beyond basic SNAP information and blank SNAP application forms. By contrast, no statistically significant effects were observed, compared to the control group, when H&R Block filled out the forms, handed them to families, and explained where and how to file them.80
- When H&R Block used tax return data and interviews to complete and file college student aid forms on behalf of families, successfully filed applications for aid were 40 percent higher than in the control group that received only general information about college aid. By contrast, no statistically significant effects were observed when H&R Block gave the families written, personalized estimates of their likely eligibility for student aid, along with information about tuition costs at nearby colleges and instructions about completing the application process.81
In some cases, when agencies have gone beyond mere referrals to send application forms to potentially eligible consumers, relatively few people have enrolled. For example:
- In 2002 the Social Security Administration sent 16.4 million letters to low-income Medicare beneficiaries who were probably eligible, according to federal income data, for Medicare Savings Programs (MSP). The letters provided information about MSP, which pays some or all Medicare cost-sharing, depending on income. The letters also listed a phone number that could be called to enroll. Only 74,000 people—0.5 percent of letter recipients—enrolled in MSP as a result.82
- Since the late 2000s, Iowa and New Jersey have required taxpayers to indicate on state income tax returns whether their children have insurance coverage. In 2009, when parents in these states said that their children were uninsured, they were mailed application forms for health coverage, along with information about how to enroll. In Iowa, roughly 1 percent of parents filed application forms and sought coverage.83 New Jersey streamlined its already simple child health application—eliminating all income questions, for example—and mailed out approximately 172,000 simplified forms to parents who indicated that their children were uninsured, accompanying the mailer with a targeted media campaign; roughly 750 children enrolled—less than 0.5 percent of the children in these families.84
- More recently, several states have implemented ELE using enrollment processes that reached many fewer children than the ELE approaches described above for Louisiana and South Carolina. Iowa, Oregon, Maryland, and New Jersey each sent simplified health forms to families whose children received SNAP, participated in the National School Lunch Program, or potentially qualified for Medicaid or CHIP based on state income tax records. For children to receive ELE, families needed to complete these simplified forms by mail or phone. Many forms did not even ask about income. Typically, 5 percent or fewer of families who were sent such forms returned them. In the most successful ELE processes that required this step, just 13 percent of families returned the forms.85 More recent efforts at Medicaid targeted enrollment strategies have achieved much better results, as explained earlier, but the initial mailing response rates still averaged only 34 percent.
- Even asking consumers to complete a simple “opt-in” check-box can dramatically reduce participation levels. As explained earlier, when problems with the state’s information technology systems forced Louisiana’s ELE program to shift from its “consent through accessing care” policy to a new approach through which parents consented to enrollment by checking a box on the SNAP application form, the average number of children being enrolled via ELE as a result of monthly SNAP applications fell by 62 percent.86
This behavioral pattern is not unique to low-income people seeking public benefits. For example, similar patterns are observed with enrollment of many middle-income people into retirement savings accounts. In one classic example, roughly 33 percent of newly hired workers enroll in 401(k) accounts when their employer requires them to complete a form. In firms where such workers are enrolled unless they complete a form opting out, 90 percent participate.87
Another study, aptly titled, “$100 Bills on the Sidewalk,” analyzed seven companies that offered employer matches to worker contributions into 401(k) accounts. Workers over 591⁄2 years of age could obtain employer payments without cost; because of their age, such employees’ contributions could be withdrawn, immediately, without penalty. Nevertheless, at each of the seven firms, between 20 and 60 percent of eligible workers failed to claim their employers’ maximum matching contribution, with losses that could range as high as 6 percent of annual income. At the median firm, 31 percent left employer contributions unclaimed, averaging 2 percent of annual income.
Researchers implemented a careful education intervention that, among other things, had each worker calculate the amount of employer contributions that the worker was leaving unclaimed. Participation rates increased by just one-tenth of one percentage point, compared to a control group that received no educational intervention. Researchers concluded, “In this instance, providing better information did not lead to better choices.”88