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Does personalized information improve health plan choices when individuals are distracted?

Author

Listed:
  • Cornel Kaufmann
  • Tobias Mueller
  • Andreas Hefti
  • Stefan Boes

Abstract

Choice-based health insurance systems allow individuals to select a health plan that fits their needs. However, bounded rationality and limited attention may lead to sub-optimal insurance coverage and higher-than-expected out-of-pocket payments. In this paper, we study the impact of providing personalized information on health plan choices in a laboratory experiment. We seek to more closely mimic real-life choices by randomly providing an incentivized distraction to some individuals. We find that providing personalized information significantly improves health plan choices. The positive e ect is even larger and longer-lasting if individuals are distracted from their original task. In addition to providing decision support, receiving personalized information restores the awareness of the choice setting to a level comparable to the case without distraction thus reducing inertia. Our results indicate that increasing transparency of the health insurance system and providing tailored information can help individuals to make better choices and reduce their out-of-pocket expenditures.

Suggested Citation

  • Cornel Kaufmann & Tobias Mueller & Andreas Hefti & Stefan Boes, 2018. "Does personalized information improve health plan choices when individuals are distracted?," Diskussionsschriften dp1808, Universitaet Bern, Departement Volkswirtschaft.
    • Handle: RePEc:ube:dpvwib:dp1808
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    3. Altmann, Steffen & Grunewald, Andreas & Radbruch, Jonas, 2019. "Passive Choices and Cognitive Spillovers," IZA Discussion Papers 12337, Institute of Labor Economics (IZA).
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    5. Raf Van Gastel & Tim Goedemé & Julie Janssens & Eva Lefevere & Rik Lemkens, 2017. "A Reminder to Pay Less for Healthcare: take-up of Increased Reimbursement in a large-scale randomized field experiment," Working Papers 1712, Herman Deleeck Centre for Social Policy, University of Antwerp.
    6. Ana Cecilia Quiroga Gutierrez & Stefan Boes, 2024. "Bridging the gap: Experimental evidence on information provision and health insurance choices," Health Economics, John Wiley & Sons, Ltd., vol. 33(6), pages 1368-1386, June.
    7. Sai Krishnan S. & Subramanian S. Iyer & Sai Balaji SMR, 2022. "Insights from behavioral economics for policymakers of choice‐based health insurance markets: A scoping review," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 25(2), pages 115-143, June.
    8. Hodor, Michal, 2021. "Family health spillovers: evidence from the RAND health insurance experiment," Journal of Health Economics, Elsevier, vol. 79(C).
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    More about this item

    Keywords

    health insurance choice; decision under uncertainty; limited attention; information; laboratory experiment;
    All these keywords.

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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