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Health Insurance Menu Design for Large Employers

Kate Ho and Robin Lee
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Kate Ho: Princeton University

Working Papers from Princeton University. Economics Department.

Abstract: We explore the challenges faced by a large employer designing a health insurance plan menu for its employees. Using detailed administrative data from Harvard University, we estimate a model of plan choice and utilization, and evaluate the benefits of cost sharing and plan variety. For a single plan with a generous out-of-pocket maximum, we find that modest cost sharing of approximately 30% maximizes average employee surplus. Further gains from offering choice are limited if based solely on financial dimensions, but can be economically significant if paired with other features that appeal to sicker households.

Keywords: Health insurance; Health care (search for similar items in EconPapers)
JEL-codes: I11 I13 L20 (search for similar items in EconPapers)
Date: 2021-01
New Economics Papers: this item is included in nep-ban, nep-hea and nep-ias
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https://scholar.princeton.edu/sites/default/files/ ... plan_menu_design.pdf

Related works:
Journal Article: Health insurance menu design for large employers (2023) Downloads
Working Paper: Health Insurance Menu Design for Large Employers (2020) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:pri:econom:2021-63

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