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Consumers, health insurance and dominated choices

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  • Sinaiko, Anna D.
  • Hirth, Richard A.
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    Abstract

    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.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Health Economics.

    Volume (Year): 30 (2011)
    Issue (Month): 2 (March)
    Pages: 450-457

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    Handle: RePEc:eee:jhecon:v:30:y:2011:i:2:p:450-457

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    Web page: http://www.elsevier.com/locate/inca/505560

    Related research

    Keywords: Dominated choice Health plan choice Employer-sponsored health insurance;

    References

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    Cited by:
    1. Heiss, Florian & Leive, Adam & McFadden, Daniel & Winter, Joachim, 2012. "Plan Selection in Medicare Part D: Evidence from administrative Data," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 384, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    2. Randall Ellis, 2012. "Five questions for health economists," International Journal of Health Care Finance and Economics, Springer, vol. 12(3), pages 217-233, September.
    3. Normann Lorenz, 2014. "Adverse selection and heterogeneity of demand responsiveness," Research Papers in Economics 2014-02, University of Trier, Department of Economics.
    4. Normann Lorenz, 2013. "Adverse selection and risk adjustment under imperfect competition," Research Papers in Economics 2013-05, University of Trier, Department of Economics.
    5. Wuppermann, Amelie C. & Bauhoff, Sebastian & Grabka, Markus M., 2014. "The Price Sensitivity of Health Plan Choice: Evidence from Retirees in the German Social Health Insurance," Discussion Papers in Economics 21080, University of Munich, Department of Economics.

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