Insurance Plan Choices: Evidence from ACA Exchanges
The papers proposed in this session explore different aspects of how non-elderly individuals choose their health insurance plans in the post-ACA world that is characterized by the increasing prominence of consumer choices in health insurance. An active literature has examined the consequences of introducing choice in public health insurance settings for seniors, such as Medicare Advantage and Medicare Part D; we know much less, however, about the preferences and the choice behavior of the non-elderly population. The latter knowledge, however, is critical for the policy-making across a multitude of ACA provisions, whose success relies critically on the extent of consumers' willingness to pay for various aspects of health insurance in Exchange environments. The proposed papers explore several factors that may affect this willingness to pay - behavioral biases, behavioral policy nudges, risk aversion - and the empirical methods that can be used to recover and quantify these factors from observational and experimental data. The first paper explores the methodological frontier of recovering risk and risk aversion distributions from observed choices of health insurance on the Massachusetts Health Insurance Exchange. The second paper assess how the individuals’ willingness to pay for multi-dimensional health insurance contracts changes in the presence of “nudging” policies that simplify the choice space, using the ACA Health Insurance Marketplaces as the empirical setting. Finally, the third paper uses a combination of demand modelling and a randomized control trial to measure the extent of behavioral frictions in individuals’ choice of insurance and which policies may countervail these frictions.