Do Individuals Make Sensible Health Insurance Decisions ? Evidence from a Menu with Dominated Options

@inproceedings{Bhargava2015DoIM,
  title={Do Individuals Make Sensible Health Insurance Decisions ? Evidence from a Menu with Dominated Options},
  author={Saurabh Bhargava and George Loewenstein and Justin R. Sydnor},
  year={2015}
}
The recent expansion of health-plan choice has been touted as increasing competition and enabling people to choose plans that fit their needs. This study provides new evidence challenging these proposed benefits of expanded health-insurance choice. We examine health-insurance decisions of employees at a large U.S. firm where a new plan menu included a large share of financially dominated options. This menu offers a unique litmus test for evaluating choice quality since standard risk preferences… CONTINUE READING

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