title: Designing and regulating health insurance exchanges: lessons from Massachusetts.
abstract: The Massachusetts health care reform provides preliminary evidence on the function of health insurance exchanges and individual insurance markets. This paper describes the type of products consumers choose and the dynamics of consumer choice. Evidence shows that choice architecture, including product standardization and the use of heuristics (rules of thumb), affects choice. In addition, while consumers often choose less generous plans in the exchange than in traditional employer-sponsored insurance, there is considerable heterogeneity in consumer demand, as well as some evidence of adverse selection. We examine the role of imperfect competition between insurers, and document the impact of pricing and product regulation on the level and distribution of premiums. Given our extensive choice data, we synthesize the evidence of the Massachusetts exchange to inform the design and regulation on other exchanges.
authors.affiliation: Boston University, School of Management, USA. kericson@bu.edu
authors.forename: Keith M Marzilli
authors.initials: KM
authors.lastname: Ericson
authors.forename: Amanda
authors.initials: A
authors.lastname: Starc
mesh_terms: D000328:Adult; D000367:Age Factors; D002755:Choice Behavior; D003258:Consumer Behavior; D003365:Costs and Cost Analysis; D003657:Decision Making; D005260:Female; D005382:Financing, Personal; D033161:Government Regulation; D062265:Health Insurance Exchanges / Q000458:organization & administration*; D006801:Humans; D007343:Insurance Carriers / Q000706:statistics & numerical data; D008297:Male; D008404:Massachusetts; D008875:Middle Aged; D012737:Sex Factors; D013660:Taxes