Can consumers make affordable care affordable? The value of choice architecture

Tens of millions of people are currently choosing health coverage on a state or federal health insurance exchange as part of the Patient Protection and Affordable Care Act. We examine how well people make these choices, how well they think they do, and what can be done to improve these choices. We c...

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Bibliographic Details
Published in:PloS one 2013-12, Vol.8 (12), p.e81521-e81521
Main Authors: Johnson, Eric J, Hassin, Ran, Baker, Tom, Bajger, Allison T, Treuer, Galen
Format: Article
Language:English
Subjects:
Analysis
Automobile insurance
Choice Behavior
Community Participation - economics
Consumers
Costs
Decision making
Design
Economic incentives
Experiments
Graduate students
Health care policy
Health insurance
Health insurance exchanges
Health insurance industry
Humans
Incentives
Insurance, Health - economics
Medicare
Obesity
Older people
Patient Protection & Affordable Care Act 2010-US
Patient Protection and Affordable Care Act
Prescription drug plans
Prescription drugs
United States
Websites
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Summary:Tens of millions of people are currently choosing health coverage on a state or federal health insurance exchange as part of the Patient Protection and Affordable Care Act. We examine how well people make these choices, how well they think they do, and what can be done to improve these choices. We conducted 6 experiments asking people to choose the most cost-effective policy using websites modeled on current exchanges. Our results suggest there is significant room for improvement. Without interventions, respondents perform at near chance levels and show a significant bias, overweighting out-of-pocket expenses and deductibles. Financial incentives do not improve performance, and decision-makers do not realize that they are performing poorly. However, performance can be improved quite markedly by providing calculation aids, and by choosing a "smart" default. Implementing these psychologically based principles could save purchasers of policies and taxpayers approximately 10 billion dollars every year.
ISSN:1932-6203
1932-6203
DOI:10.1371/journal.pone.0081521