Consumers' misunderstanding of health insurance

George Loewenstein, Joelle Y. Friedman, Barbara McGill, Sarah Ahmad, Suzanne Linck, Stacey Sinkula, John Beshears, James Choi, Jonathan Kolstad, David Laibson, Brigitte C. Madrian, John A. List, Kevin G. Volpp

Research output: Contribution to journalArticleResearchpeer-review

106 Citations (Scopus)

Abstract

We report results from two surveys of representative samples of Americans with private health insurance. The first examines how well Americans understand, and believe they understand, traditional health insurance coverage. The second examines whether those insured under a simplified all-copay insurance plan will be more likely to engage in cost-reducing behaviors relative to those insured under a traditional plan with deductibles and coinsurance, and measures consumer preferences between the two plans. The surveys provide strong evidence that consumers do not understand traditional plans and would better understand a simplified plan, but weaker evidence that a simplified plan would have strong appeal to consumers or change their healthcare choices.

Original languageEnglish
Pages (from-to)850-862
Number of pages13
JournalJournal of Health Economics
Volume32
Issue number5
DOIs
Publication statusPublished - Sep 2013
Externally publishedYes

Keywords

  • Behavioral economics
  • Insurance
  • Simplification

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