Using medical enrollment and claims data for school district employees in the state of Oregon, researchers find average potential cost savings of $600. They also find that employees showed consistent biases in their choices, usually choosing a closely-located plan on the plan design spreadsheet when switching, and usually making lower-cost choices when there were fewer options. Researchers conclude that fewer options lead to lower-cost choices not because of information overload, but because more options tends to bring worse choices into the mix.
Abstract and Citation
Jason Abaluck, Jonathan Gruber, When Less is More: Improving Choices in Health Insurance Markets, The Review of Economic Studies, 2022;, rdac050, https://doi.org/10.1093/restud/rdac050