Simple Humans, Complex Insurance, Subtle Subsidies (original) (raw)

Consumers, health insurance and dominated choices

Journal of Health Economics, 2011

We analyze employee health plan choices when the choice set offered by their employer includes a dominated plan. During our study period, one-third of workers were enrolled in the dominated plan. Some may have selected the plan before it was dominated and then failed to switch out of it. However, a substantial number actively chose the dominated plan when they had an unambiguously better choice. These results suggest limitations in the ability of health reform based solely on consumer choice to achieve efficient outcomes and that implementation of health reform should anticipate, monitor and account for this consumer behavior.

Who Chooses A Consumer-Directed Health Plan?

Health Affairs, 2008

Consumer-directed health plans (CDHPs) hold the promise of reining in health spending by giving consumers a greater stake in health care purchasing, yet little is known about employers' experience with these products. In examining the characteristics of those selecting a CDHP offered by one large employer, we found stronger evidence of selection than has been identified in prior research. Our findings suggest that in the context of plan choice, CDHPs may offer little opportunity to greatly lower employers' cost burden, and they highlight concerns about the potential for risk segmentation and the value of conferring preferential tax treatment to CDHPs.

An Experimental Investigation of Health Insurance Policy and Behavior

2020

We introduce a new experimental approach to measuring the effects of health insurance policy alternatives on behavior and health outcomes over the life course. Cash-motivated subjects are placed in a virtual environment where they earn income and allocate it across multi-period lives. We compare behavior across age, income and insurance plans—one priced according to an individual’s expected cost and the other uniformly priced through employer-implemented cost sharing. We find that 1) subjects in the employer-implemented plan purchased insurance at higher rates; 2) the employer-based plan reduced differences due to income and age; 3) subjects in the actuarial plan engaged in more health-promoting behaviors, but still below optimal levels, and did save at the level required, so did realize the full benefits of the plan. Subjects had more difficulty optimizing choices in the Actuarial treatment, because it required more long term planning and evaluating benefits that compounded over ti...

Cost Sharing and the Changing Pattern of Employer-Sponsored Health Benefits

The Milbank Quarterly, 1987

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Employee Choice of Consumer-Driven Health Insurance in a Multiplan, Multiproduct Setting

Health Services Research, 2004

Objective. To determine who chooses a Consumer-Driven Health Plan (CDHP) in a multiplan, multiproduct setting, and, specifically, whether the CDHP attracts the sicker employees in a company's risk pool. Study Design. We estimated a health plan choice equation for employees of the University of Minnesota, who had a choice in 2002 of a CDHP and three other health plans--a traditional health maintenance organization (HMO), a preferred provider organization (PPO), and a tiered network product based on care systems. Data from an employee survey were matched to information from the university's payroll system. Principal Findings. Chronic illness of the employee or family members had no effect on choice of the CDHP, but such employees tended to choose the PPO. The employee's age was not related to CDHP choice. Higher-income employees chose the CDHP, as well as those who preferred health plans with a national provider panel that includes their physician in the panel. Employees tended to choose plans with lower out-of-pocket premiums, and surprisingly, employees with a chronic health condition themselves or in their family were more price-sensitive.