Medicare Health Plan Choices of the Elderly: A Choice-With-Screening Model

Qian Li and Pravin Trivedi

Journal of Business & Economic Statistics, 2012, vol. 30, issue 1, 81-93

Abstract: With the expansion of Medicare, increasing attention has been paid to the behavior of elderly persons in choosing health insurance. This article investigates how the elderly use plan attributes to screen their Medicare health plans to simplify a complicated choice situation. The proposed model extends the conventional random utility models by considering a screening stage. Bayesian estimation is implemented, and the results based on Medicare data show that the elderly are likely to screen according to premium, prescription drug coverage, and vision coverage. These attributes have nonlinear effects on plan choice that cannot be captured by conventional models. This article has supplementary material online.

Date: 2012
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Journal Article: Medicare Health Plan Choices of the Elderly: A Choice-With-Screening Model (2011)
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DOI: 10.1198/jbes.2011.0819

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