Health Plan Choice and Information about Out-of-Pocket Costs

An Experimental Analysis

Michael Schoenbaum, Mark Spranca, Marc N. Elliott, Jay Bhattacharya, Pamela Farley Short

ResearchPublished 2001

Many consumers are offered two or more employer-sponsored health insurance plans, and competition among health plans for subscribers is promoted as a mechanism for balancing health care costs and quality. Yet consumers may not receive the information necessary to make informed health plan choices. This study tests the effects on health plan choice of providing supplemental decision-support materials to inform consumers about expected health plan costs. Our main finding is that such information induces consumers to bear more risk, especially those in relatively good health. Thus our results suggest that working-age, privately insured consumers currently may be over-insuring for medical care.

Reprinted with permission from Inquiry, Vol. 38, No. 1, Spring 2001, pp. 35-48. Copyright © 2001 Blue Cross and Blue Shield Association and Blue Cross and Blue Shield of the Rochester Area.

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Document Details

  • Copyright: RAND Corporation
  • Publisher: Blue Cross and Blue Shield Association and Blue Cross and Blue Shield of the Rochester Area
  • Availability: Web-Only
  • Year: 2001
  • Pages: 14
  • Document Number: RP-1347

Originally published in: Inquiry, Vol. 38, No. 1, Spring 2001, pp. 35-48.

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