RAND Behavioral Finance Webinar

The Complexity of Health Plan Choice

by Saurabh Bhargava

The research looks at health insurance plans chosen by employees at a Fortune 500 company once they were allowed to configure their own plans. The vast majority of plans that were available were dominated by another plan in the choice set. This glitch provides a rare opportunity to observe how well people make decisions. Many employees did not notice: two-thirds of employees ended up choosing a plan that was several hundred dollars more per year than a plan that offered the same coverage.

This report is part of the RAND Corporation presentation series. RAND presentations may include briefings related to a body of RAND research, videos of congressional testimonies, and a multimedia presentation on a topic or RAND capability. All RAND presentations represent RAND's commitment to quality and objectivity.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.