Determinants of coverage decisions in health insurance marketplaces: consumers' decision-making abilities and the amount of information in their choice environment

Abstract

Objective: To investigate the determinants and quality of coverage decisions among uninsured choosing plans in a hypothetical health insurance marketplace.

Study setting: Two samples of uninsured individuals: one from an Internet-based sample comprised largely of young, healthy, tech-savvy individuals (n = 276), and the other from low-income, rural Virginians (n = 161).

Study design: We assessed whether health insurance comprehension, numeracy, choice consistency, and the number of plan choices were associated with participants' ability to choose a cost-minimizing plan, given their expected health care needs (defined as choosing a plan costing no more than $500 in excess of the total estimated annual costs of the cheapest plan available).

Data collection: Primary data were collected using an online questionnaire.

Principal findings: Uninsured who were more numerate showed higher health insurance comprehension; those with more health insurance comprehension made choices of health insurance plans more consistent with their stated preferences; and those who made choices more concordant with their stated preferences were less likely to choose a plan that cost more than $500 in excess of the cheapest plan available.

Conclusions: Increasing health insurance comprehension and designing exchanges to facilitate plan comparison will be critical to ensuring the success of health insurance marketplaces.

Keywords: Affordable Care Act; health insurance comprehension; health insurance exchanges/marketplaces; insurance choice; numeracy; uninsured.

Figure 1

Three- and Nine-Plan Choice Condition