Assessing Choices and Choice Landscape in Health Insurance Marketplaces

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OTHER PROJECT INFORMATION – Project Summary/Abstract The combination of high health care costs and unequal access to health insurance has a strong potential to generate inequality in health outcomes across the society. Recognizing the importance of health insurance access, policymakers have advanced several initiatives to address the access barriers. A prominent component of recent programs is the emphasis on consumer choice within regulated health insurance environments that strive to create incentives for insurers to provide high-quality, affordable health plans. To formulate best policies within these environments, it is important to understand the determinants of individuals' decisions to purchase insurance, which type of insurance appears to be most valuable, and how these aspects differ across time, locations, demographic characteristics, and economic conditions of the potential enrollees. In this project, we propose to use data from newly created ACA Health Insurance Marketplaces to explore these issues empirically. Studying the Marketplaces environment is not only inherently relevant for shedding light on the current policy issues, it also gives us an opportunity to explore the preferences for health insurance among non-elderly, and potentially underinsured, populations for whom we so far had little systematic data or knowledge. In the first step, we take advantage of this new setting and data and estimate a random utility model of demand for health insurance plans on the Exchanges. The estimates from the model allow us to say what determines the individuals' decisions to enroll in a plan and how much individuals value, in dollar terms, each feature of the Exchange plans. The estimates further elucidate how these valuations differ across different demographic and socio-economic groups. Further, the estimates allow us to explore evidence for any behavioral biases in the decision-making, and the effects of policies that strive to reduce such biases. In the second step, we proceed to ask how the revealed preferences for health plan features that we estimate could be used by policy-makers as a metric for assessing the development of the complex multi-dimensional offerings on the Marketplaces. This project advances our understanding of the new ACA Marketplace environment. It also advances our so far limited understanding of health insurance preferences, and decision- making in the insurance domain, of non-elderly adults across a diverse set of socio-demographic backgrounds.