Consumers, health insurance and dominated choices

Anna D. Sinaiko and Richard A. Hirth

Journal of Health Economics, 2011, vol. 30, issue 2, 450-457

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.

Keywords: Dominated; choice; Health; plan; choice; Employer-sponsored; health; insurance (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:30:y:2011:i:2:p:450-457

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