Consumer Decision Making In The Individual Health Insurance Market

On the Relative Importance of Different Factors Explaining Health Plan Choices: Evidence From Mandatory Health Insurance in Switzerland

Many factors influence health plan choices. Classical individual-level determinants include socioeconomic and health-related characteristics, and risk attitudes. However, little is known to what extent personality traits can determine insurance choices. Using representative survey data from Switzerland, we investigate the associations between choices of health plans and traditional individual factors as well as personality traits. We employ dominance analysis to explore the relative importance of the different predictors. We find that personality traits play an at least equally important role in predicting health plan choices as common factors like age, health status, and income. Our results have implications regarding recent efforts to empower people in making better health plan choices and support theoretical models that integrate insights from behavioral sciences.

Decision-Making Experiences Of Consumers Choosing Individual-Market Health Insurance Plans

The health insurance Marketplaces established by the Affordable Care Act include features designed to simplify the process of choosing a health plan in the individual, or nongroup, insurance market. While most individual health insurance enrollees purchase plans through the federal and state-based Marketplaces, millions also purchase plans directly from an insurance carrier (off Marketplace). This study was a descriptive comparison of the decision-making processes and shopping experiences of consumers in two states who purchased a health insurance plan from the same large insurer in 2017, either through the federal Marketplaces or off Marketplace. In a survey, those who selected plans through the Marketplaces reported less difficulty finding the best or most affordable plan than did those enrolling off Marketplace. Respondents in families with chronic health conditions who enrolled through the Marketplaces reported better overall experiences than those who enrolled off Marketplace. Respondents with low health insurance literacy reported poor experiences in enrolling both through the Marketplaces and off Marketplace. Access to consumer assistance in the individual health insurance market should target off-Marketplace populations as well as all populations with low health insurance literacy.

Price and the Demand for Nongroup Health Insurance

In light of recent interest in tax credits and other price-based incentives to stimulate the purchase of insurance, this study estimates the price elasticity of demand for nongroup health insurance for single workers without access to employer-sponsored insurance. Our premium measure explicitly accounts for two components that have not been examined in previous studies: 1) health status, and 2) the effect of state-level premium rating regulations. We estimate a price elasticity of –.59, which, given the low rate of initial coverage in our sample (16.4%), translates to a small effect on the uninsured.