My son is starting his Terrible Twos.
One of the great challenges he faces is his cognitive processing ability crashes six hours after he wake sup. He just can not make a decision as to whether or not he wants to watch Team Umizoomi or Bubble Guppies and once he decided that he wants Chuggington (which was never in the choice space), figuring out what episode he wants is another choice that he can not make. He can say no, and he can get frustrated but he can not process what he actually desires.
One of the ways that we short-circuit a tantrum yet to be is by me becoming absolutely absurd. I’ll put a shoe on my head and ask him if that is where it belongs. I will try to wear his jacket or use the cat as a shawl or attempt to read a book with my toes. Any of these actions will prompt a storm of laughing No’s and Silly Daddy, which cascades into giggles as he shows me HOW THINGS SHOULD BE and he forgets about the decision that he could not make. And then we start bed or nap time.
Everyone has processing limits. Most adults processing limits are significantly higher than those of an adorable toddler, but our limits are finite. Choice overload leads to very predictable cognitive biases as we shut down as the search and sorting costs of massive flows of poorly organized information aren’t worth the gains of making an optimal choice, so we satisfice instead on the criteria of stopping the pain of making a horrendous choice and make mediocre choices.
This is one of the problems of the Exchange model. Uncurated choices produce overload.
Austin Frakt contemplates the cognitive demands that buying individual market health insurance entails:
the federal employee program offers me about 20 plans to choose from, and a similar number to almost all other federal employees….
Health insurance has not one but many price-like characteristics. The premium is the most salient price, perhaps. But there are lots of others like co-payments (fixed dollar amounts you pay each time you visit a doctor, get a lab test or pick up a prescription), co-insurance (a percentage of the cost you pay for each visit, test or prescription), and deductibles (how much you pay before your plan pays a single dollar). Complicating matters, deductibles do not apply to every service, and co-payments and co-insurance can vary by service — a different amount for a hospital stay vs. a primary care visit vs. a visit to a specialist, for a brand-name drug vs. a generic, and so forth.
Given all this, computing something like a sticker price for a plan is daunting. The actual amount an insurance plan will cost me next year is its premium plus a complex interaction of its various other prices with the specific types of health care services my family will use…
He is juggling 20 sets of complex, interacting multiple variable problems with massive uncertainty as no one prices in getting hit by a bus, and few know their absolute or relative risk of naked mopping injuries. Austin is a health care wonk’s wonk, and he is overloaded with his choice set so he probably satisfices.
New Hampshire Exchange buyers will be facing a massively more complicated task this year than last year:
There will be more than 60 health plans available to consumers in New Hampshire when enrollment begins next month, up from the 11 offered during the first year of the federal health care overhaul...Five carriers will be offering plans …Anthem was the only company selling health plans through the new marketplace this year and was criticized for including only 16 of 26 hospitals in the network. This time around, each hospital in the state is expected to be included in at least three of the provider networks.
New Hampshire residents are seeing a whole lot more choices, including a far broader array of hospitals and doctors they can see, but they will also see significant duplication of choices. We know from the Medicare Part C and D worlds, that people will avoid making hard choices to find better insurance suited to their needs by sticking with what they have.
Colorado residents are in the same boat:
Brisk competition in the marketplace among insurance carriers led to a widespread and significant drop in the index premium, which the ACA defines as the price of the second-lowest-cost silver, or mid-level, health plan in any given geographic area…
The new benchmark plan with a lower premium is being offered by the nonprofit ColoradoHealthOp. Altogether, the number of plans for consumers to choose from jumped from 150 in 2014 to 176 in 2015.
Eighty-one percent of enrollees live in areas of the state where the second-lowest-cost silver plan is decreasing in price by more than 15 percent. Premiums for the second-lowest-cost silver plan dropped in every one of the nine rating areas across the state except Mesa County.
The number of choices increased by 15% and the pricing after subsidy has changed dramatically. People will be confused and they will not be making optimal choices. On average, people will be making decent enough and good enough choices, but not optimal choices. Colorado’s decision load is higher than New Hampshires as Colorado’s current Exchange buyers are dealing with significant post-subsidy price swings as well as network/plan configuration questions while New Hampshire seems to have tightly clustered Silver plans so pricing after subsidy will only be a few extra dollars per month for the #3 or #4 Silver compared to the #2 or #1.
The Exchanges are making some efforts to reduce the decision load. The biggest has been the spread of navigators and brokers who know how to break information down into digestible bits and curate choices. Someone who is extremely price sensitive and in decent health probably does not need to spend time looking at Platinum broad network plans. Someone who is in ill health and under the age of 30 probably does not need to know much about Catastrophic or Bronze plans. A knowledgable broker or navigator will be able to quickly tell someone whether or not Big City Medical Group or Super High Prestige Specialty Hospital is in the network of a given plan. Good assistance can narrow the choice set down to a managable number where near optimizing decisions can be made.
The Federal Exchanges will allow window shopping soon, and this will help as well as it reduces time pressure to make decisions. But right now, there is no Healthcare.gov decision support tool to help people narrow their choices from 176 to 5 or 6 that would need significant time to investigate and choose one of the top two or three choices.
Baud
I’m going through the choice problem in looking for a new cell phone. It’s frustrating.
Baud
Almost forgot. Too many choices? Repeal and replace!
Belafon
Since I make enough money, I deal with this by buying the most comprehensive plan my company offers, even though I probably do not need and will not need it all, even when my son breaks one of the bones in his hand. I just don’t feel like trying to figure out the options.
Edit: My company buys a lot of toys at Christmas for local charities. To pay for it, employees collect money through various in house fund raisers. One of the groups has turned a cube into a mini-store. The cube is so full that when you walk into it the first time, you are just overwhelmed. It takes a good ten minutes to be able to focus on the individual things in the “store”.
Elizabelle
@Baud:
Ooh, keep me posted. I will be in the market soon too. Have an (antique) iPhone 3GS.
Elizabelle
I’m reading Barry Schwartz’s “The Paradox of Choice: Why More is Less” and boy, do his principles fit here.
A TED talk he gave.
I'mNotSureWhoIWantToBeYet
It’s a Typical Situation (5:59 – May Autoplay), isn’t it?
(You’ve got a knack for telling entertaining stories about your youngster. :-)
Cheers,
Scott.
Wayne
When my first kid turned two I assumed the phrase “terrible twos” meant it would get better after. Ha ha, joke was on us. “terribler threes” was apppropriate. Of course when she turned 13 those early years seemed like a cake walk. Fun times.
MomSense
@Elizabelle:
I hate buying cell phones and computers. Always feel like I am being ripped off and I just don’t care that much about them.
I’m starting to think about my options for health plans. I really like my insurer Maine Community Health but I think I need to up to a better silver because I need regular labs and a prescription now. I want my insurance to pay a higher percentage of the lab work.
gene108
Any thoughts on writing about employer based coverage and what is happening there.
I’ve been handling benefits, where I work, for the past 16 years and have my limited, anecdotal experience, on why employer based coverage sucks donkey balls for everyone, with maybe the exception of insurance brokers.
The time spent in finding a new plan*, when faced with the inevitable rate hike**, dealing with sales calls from insurance brokers to get your business from the incumbent, as well as educating yourself enough on healthcare rules that you are not totally ignorant, when dealing with employees, when that is not your main job, really is a major drag on my and the company’s time that really does not add any value for the business.***
Also, high deductible plans seem to be where health care coverage is going in the foreseeable future. What are your thoughts on how this will effect how the insurance industry behaves, since they are no longer responsible for the first dollar spent? Will they continue to require more pre-screenings / approvals for procedures, such as an MRI versus an X-Ray or will they leave it to the consumer, as the consumer is footing the bill initially?
* It’s like shopping for a big ticket item, with the associated sales guys trying to get you to buy their product every year. At some point, I’d rather just have a different system in place.
** It’s a several weeks process that invariably ends up with explaining to employees why benefits are cut and employee contributions go up, because we have been hit with a 10% to 30% rate increase, though we did have a good run from about 2010 to last year, where we 1% to 3% rate increases, so I did not have to redesign the plan.
*** You can “add value” with insurance renewals, if you find a way to carve off enough of the benefits / shift costs, in order to boost profits. This is a short term strategy, as the rate of medical inflation will overtake whatever cost cutting measures you thought were enough to recoup the lost income from the previous rate hike.
gene108
I learned a new word today! Thanks Richard.
Baud
@Elizabelle:
Suzanne said the iPhone doesn’t work well with BJ, so that’s off my list. There’s a new Droid that’s coming out today that looks sweet. It’s only on Verizon, but that’s currently my carrier.
BillinGlendaleCA
@Baud: Have you thought about Samsung. I’ve got the Note 3 and absolutely love it. One of the nice things about the Sammy’s is the SD slot and removable battery. The Note 4 just came out.
satby
@Baud: I just sprung 99¢ for a new Amazon Fire phone. Two year contract with AT&T, but I would have gotten a new 2 year contract when I upgraded on Verizon too. Looking forward to getting it!
Edited to add: decided on it because I really love my Kindle Fire and some days never even open the laptop any more.
Scratch
Choice overload is definitely a problem, but here in America we are so often told that the greatest thing in the world is the free market and the availability of various choices. I think, though, that we can see how this works terribly in this situation, we are asking people with imperfect understanding and often times imperfect information to make what can be dramatically different and grave decisions. It’s one where a bad decision can cause near-catastrophic or catastrophic sort of consequences.
That’s why I think it makes sense for there to either be single-payer or a heavily regulated insurance market with limited options Giving people a multitude of options is not likely to lead to everyone finding a perfect fit plan, it is more likely to lead to frustration and too many people making poor decisions or decisions that were reasonable good at the time of choosing, but the unfortunate nature of unforeseen health developments making what once seemed to be a good choice, a bad one instead.
But Benghazi!
Baud
@BillinGlendaleCA:
The Note 4 is a nice device. It’s just a tad too big for me. I want a phone that I can fit in my pocket. That said, all Android phones are now on the big side, so I might end up with a Note 4 if nothing else works.
Richard Mayhew
@I’mNotSureWhoIWantToBeYet: They always make me laugh…. my daughter right now is on a kick of figuring out exactly how big a state is and in her mind how big it “should” be. Throw in the fact that we have a couple of friends who are ex-pats in Canada, and that there are other countries where people we know and she plays with live, and that has been blowing her mind for the past two weeks.
Baud
@satby:
I’m skeptical of having my phone tied to Amazon. I don’t use their services all that much.
Richard Mayhew
@gene108: Here were some of my thoughts from a little while ago on healthcare in a couple of years:
https://balloon-juice.com/2014/09/12/healthcare-2020/
I disagree with you that insurers won’t care about the little stuff — getting good pricing on that is what most people will see as the insurance company’s job, and since that type of thing is so undifferentiated, getting good pricing is not too hard for an insurer to do.
raven
I’m trying to figure out if I should spend $75 a month for supplemental lifer insurance.
Marc
Richard – you can greatly reduce the choice overload by turning the little guy on to Yo Gabba Gabba.
Because Bootsy Collins doesn’t guest star on fucking Chuggington:
https://www.youtube.com/watch?v=tnvmvhOLeCY
d58826
Two word solution to the overload issue – single payer!!!!
raven
@Marc: Perfect for a Facebook birthday shout out!
raven
Tim Cook comes out!
oops, I guess I’m supposed to warn people it’s a Huff Post post.
NUcappy
@Baud: Check out a website called The Wirecutter. I find their writers to be very knowledgeable about the products they review, and they have a specific section devoted to Android phones that gets updated every few months or so. I’ve got a Moto X from last year which they recommended and which I love, so I think it’s worth checking out to help in your decision making.
MomSense
@Marc:
I think I miss Arthur more than my kids do. I love that bespectacled aardvark.
The funniest thing was coming home to find my mom and my then toddler totally tripping on Boohbah. They were mesmerized. My mom said she was having ’60s flashbacks.
nancydarling
I solve my problem with what to buy in the tech department by doing whatever my son tells me to do.
I’m much more knowledgeable in dealing with two-year-olds since I’ve done it twice. Since “no” is their favorite word, never ask a question that can be answered with it.
Richard Mayhew
@Marc: He is not a big fan of YoGabbaGabba — now his sister was entranced by DJ Lance for 6 months at this age, but it does not do it for him.
Big G
Richard, I was thinking of mailing you about this very problem (choice overload).
My parents were covered under Medicare + General Electric retiree supplemental insurance; the latter is disappearing in a couple months. GE setup their own exchange, which includes 4 supplemental plans, about 20 Part D plans and 19 Medicare Advantage plans. If they pick a plan off of this exchange GE will contribute $1000/person/year toward expenses. My parents (87 and 84) are supposed to navigate this system (they don’t do computers at all), when they really don’t even understand the coverage they currently have – all they know is that they never need cash for anything (premium, co-pay , co-insurance, drugs), but they think some amount is being deducted from his pension, but don’t know. So I’m trying to figure it all out over the phone from 2000 miles away, but conversations with my father about anything more complicated than today’s weather are becoming extremely difficult, and its stressing us all out immensely as the clock ticks away. Everyday they get some new advice or paperwork from GE or some company (insurers, including those not on the exchange, have swooped in like vultures to hold ‘informational’ sessions and push high-pressure sales).
Can you recommend a place to start, or a strategy?
David Fud
@Richard Mayhew: Why don’t the exchanges run a “simulation”, by which I mean an input page that allows a potential customer to input their important characteristics, and let it sort for the best plan? I really like where we have gotten in terms of standardization of health care exchange features. However, it seems to me that if we let an algorithm do the heavy cognitive lifting, it would help most consumers because they simply can’t calculate the value of these plans relative to their situation.
For example: how many kids? any chronic conditions? How many doctor visits per year? and whatever other dimensions impact the value of a particular plan to a consumer.
In any event, the exchange has obviously progressed, but still needs to improve.
Hillary Rettig
Excellent post!
Marc
@MomSense: Yeah, our son outgrew Yo Gabba Gabba before we did. It’s like somebody gave Dee-Lite a pile of money in 1993 and told them to make a kids’ show.
Richard Mayhew
@David Fud: Plenty of private exchanges do that. My company starts internal open enrollment next week for Mayhew Insurance employees. We have five choices. We can select 15-20 variables (kids, current health or health from claims history, age, risk tolerance etc) and once the hamsters on the servers stop running, it kicks out 2 choices with a 1 paragraph write-up on each and a recommendation.
We can’t have that on Healthcare.gov AS THAT WOULD BE THE GOVERNMENT TELLING US WHAT TO DO….
politics, not technology is the issue.
gelfling545
@gene108: And behold, this appears on my Facebook feed. http://www.iflscience.com/brain/learning-new-words-activates-same-brain-regions-sex-and-drugs
CONGRATULATIONS!
I’ve occasionally heard the term “option anxiety”, but was not really aware that this was a thing. I don’t have kids is probably the reason for the lack of awareness.
Steeplejack
@Baud:
I like my (first-generation) Moto X, which I got last January. In looking for a new phone (to replace a Droid Incredible I had for four years), I realized that I didn’t want one of the larger phones that are now the rage. The Moto X is 5.0" tall by 2.6" wide by 0.4" deep (curved back, so it’s even thinner at the edges). It has a 4.7" screen (720 by 1,280 pixels, 316 ppi) and weighs 4.6 ounces.
My experience is that call clarity is very good, the system is quick and responsive, and it is a camel on battery usage. I routinely go two days between charges. Lots of “regular” usage, but I don’t do much streaming (movies, music, etc.).
And you can customize the hell out of it. Mine has a bamboo back!
Mnemosyne
@Baud:
Now you understand why so many people like Apple. Sometimes having unlimited choice takes up way more brainspace than one wants to give up.
The Giant Evil Corporation is self-insured, which means that they pay Cigna and Kaiser to administer our plans, but the GEC pays all of the bills. We used to have something like 8 plans available, but since PPACA it’s been cut back to 4 (3 Cigna, 1 Kaiser), probably because of the tax on “Cadillac plans.”
The one thing that drives me nuts is that they’re constantly tweaking the prescription formulary, and you’re stuck with those decisions for a full year even if they made a bad one. The year that they decided there would be no coverage of name-brand prescriptions even if a generic was not available was pretty irritating.
burnspbesq
I may be an outlier, but brand equity played a pretty big role in my decision-making process for 2014 on Covered California. I more or less defaulted to Blue Shield, for essentially the same reason i default to brands as diverse as Tide, Uncle Ben’s, New Balance, and Sennheiser: a history of delivering quality and no unpleasant surprises.
Richard Mayhew
@burnspbesq: nope, not an outlier at all; once people find something that they trust is not screwing them over more than average, they tend to stick even if objectively speaking, something better is out there. That was a major consideration for insurers to get on the Exchanges in Year 1. They got a slightly sicker population, but also a far stickier population that will default to what they had last year unless they get screwed.
JustRuss
@d58826:
This. Here’s the “choice” I want when it comes to health care: Give me what I need and let me get on with my life. How anyone who has ever dealt with an insurance company can believe that government could actually do worse is beyond me, that’s a pretty high bar.
I’m currently dealing with my mother’s insurance trying to get them to cover her prescriptions at a new pharmacy. Somehow we’re not in compliance with one of their Byzantine requirements…and they can’t tell me specifically which one. I hate these people. No offense to Mr. Mayhew.
SWMBO
@Wayne: The Mother’s Almanac had a wonderful line in it. “If there’s anything worse than the terrible twos it’s the terrible twos-and-a-half.” Truth.