How product standardization affects choice: Evidence from the Massachusetts Health Insurance Exchange.
This paper examines the effect of choice architecture on Massachusetts' Health Insurance Exchange. A policy change standardized cost-sharing parameters of plans across insurers and altered information presentation. Post-change, consumers chose more generous plans and different brands, but were not more price-sensitive. We use a discrete choice model that allows the policy to affect how attributes are valued to decompose the policy's effects into a valuation effect and a product availability effect. The brand shifts are largely explained by the availability effect and the generosity shift by the valuation effect. A hypothetical choice experiment replicates our results and explores alternative counterfactuals.
Boston University, Boston, MA; Northwestern University, Evanston, IL. Electronic address: kericson@bu.edu.
Keith M Marzilli
KM
Ericson
Boston University, Boston, MA; Northwestern University, Evanston, IL. Electronic address: amanda.starc@kellogg.northwestern.edu.
Amanda
A
Starc
D002755:Choice Behavior; D017047:Cost Sharing; D062265:Health Insurance Exchanges; D006801:Humans; D007348:Insurance, Health; D008404:Massachusetts
Consumer choice; Framing; Health insurance; Standardization