Improving the Quality of Choices in Health Insurance Markets

Using data on enrollment and medical claims for Oregon school district employees, we document large choice inconsistencies in health insurance plan choices and then consider three types of interventions designed to improve choice quality. We first show that interventions to promote more active choice are unlikely to improve choice quality based on existing patterns of plan switching. We then implement a randomized trial of decision support software and find little impact on plan choices. Finally, we show that beneficiaries with fewer alternatives to choose from do have lower foregone savings and total costs because there are fewer bad alternatives.