How product standardization affects choice: Evidence from the Massachusetts Health Insurance Exchange

Keith Ericson and Amanda Starc

Journal of Health Economics, 2016, vol. 50, issue C, 71-85

Abstract: This paper examines the effect of choice architecture on Massachusetts' Health Insurance Exchange. A policy change standardized cost-sharing parameters of plans across insurers and altered information presentation. Post-change, consumers chose more generous plans and different brands, but were not more price-sensitive. We use a discrete choice model that allows the policy to affect how attributes are valued to decompose the policy's effects into a valuation effect and a product availability effect. The brand shifts are largely explained by the availability effect and the generosity shift by the valuation effect. A hypothetical choice experiment replicates our results and explores alternative counterfactuals.

Keywords: Health insurance; Standardization; Framing; Consumer choice (search for similar items in EconPapers)
JEL-codes: D80 I11 L15 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (39)

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Working Paper: How Product Standardization Affects Choice: Evidence from the Massachusetts Health Insurance Exchange (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:50:y:2016:i:c:p:71-85

DOI: 10.1016/j.jhealeco.2016.09.005

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