Document Type
Article
Publication Date
7-9-2013
Abstract
Starting this October, tens of millions will be choosing health coverage on a state or federal health insurance exchange as part of the Patient Protection and Affordable Care Act. We examine how well people make these choices, how well they think they do, and what can be done to improve these choices. We conducted 6 experiments asking people to choose the most cost-effective policy using websites modeled on current exchanges. Our results suggest there is significant room for improvement. Without interventions, respondents perform at near chance levels and show a significant bias, overweighting out-of-pocket expenses and deductibles. Financial incentives do not improve performance, and decision-makers do not realize that they are performing poorly. However, performance can be improved quite markedly by providing calculation aids, and by choosing a "smart" default. Implementing these psychologically-based principles could save purchasers of policies and taxpayers approximately 10 billion dollars every year.
Keywords
Choice architecture, healthcare, decision making, Affordable Care Act, insurance decisions
Publication Title
PLOS ONE
Repository Citation
Johnson, Eric J.; Hassin, Ran; Baker, Tom; Bajger, Allison T.; and Treuer, Galen, "Can Consumers Make Affordable Care Affordable? The Value of Choice Architecture" (2013). All Faculty Scholarship. 474.
https://scholarship.law.upenn.edu/faculty_scholarship/474
Included in
Health Economics Commons, Health Law and Policy Commons, Health Policy Commons, Health Psychology Commons, Insurance Commons, Insurance Law Commons, Law and Economics Commons, Marketing Commons, Public Economics Commons
Publication Citation
PLOS ONE, Dec. 18, 2013