Understanding Medicare Plan Choice: Costs, Consequences, and Policy Options

Monday, June 13, 2016: 3:00 PM-4:30 PM
G60 (Huntsman Hall)
Abigail S. Friedman

The consequences of choosing a health insurance plan with excessive financial costs or insufficient risk protection can be severe, particularly for those on a fixed income. Moreover, a variety of evidence suggests that many consumers choose plans that are not best for them, even selecting clearly dominated plans. To advance consumer welfare in this arena, an understanding of how consumer decision making and Medicare’s structure interact to shape plan choice is critical. To explore these issues, this session will begin by considering determinants of selection into different types of Medicare plan options; progress to work detailing the impact of inertia on expected costs in Medicare Advantage; and, finally, examine the potential for interventions informed by behavioral economics to shift consumers away from defaulting and inertia, and towards lower expected cost plans in Medicare Advantage.

3:00 PM
Premium and Cross-Premium Elasticity of Medicare Health Plan Choices

Author(s): Adam Atherly; Roger Feldman; Stephen T Parente

Discussant: Paul D. Jacobs

3:20 PM
The costs of plan choice and inertia in the Medicare Advantage market

Author(s): Eamon Molloy; Paul D. Jacobs

Discussant: Daria M. Pelech

3:40 PM
Using Behavioral Economics to Improve Plan Choice in Medicare: A Randomized Experiment

Author(s): Abigail S. Friedman; Richard Frank

Discussant: Anna Sinaiko