Choice Inconsistencies in Health Insurance Exchanges

Using data from the universe of public school employees in Oregon coupled with a randomized intervention, we evaluate the quality of consumers' health insurance plan choices and how those choices can be improved.  We start by extending the structural framework developed in earlier work to evaluate prescription drug insurance choices to the broader health insurance setting.  We find that consumers leave thousands of dollars on the table by not choosing the best plans for them.  We then study three proposed mechanisms for helping them choose better. First, we study the impact of a “nudge” where employees were made far more likely to switch when the names of their insurance plans changed.  Second, we conduct a randomized experiment in which some enrollees are given access to an “Informed Enrollment Tool” which provides information about what total costs are likely to be for alternative plans given their prior year claims.  Third, we use variation in choice set size across districts to analyze the impact on the quality of choices of restricting the number of options available to beneficiaries.