Insurers are coming back to the ACA markets from their 2018 participation nadir. The big national insurers ran like hell in 2017-2018. Most of them are either entering new markets or re-entering areas that they ran from several years ago. The insurers that kept on selling in 2018-2019 are still selling. They are also likely expanding their footprint.
Insurers that want to sell ACA insurance have to file their initial plans and rates with their state regulators by mid-summer of the year before the policies go on sale. Insurers and regulators may go back and forth a couple of times to get to a mutually agreeable rate that should be sound enough to survive a catastrophe. Insurers are allowed to pull plans out during this back and forth but they can not add plans during this process.
There have always been a couple of counties with more than 100 plans sold on Healthcare.gov. These counties tend to be in Florida and Wisconsin. I’ve been hearing chatter that several very large metro areas outside of these states have insurers filing to sell well over 100 plans in 2022. Some of this is new insurers going into new markets but a decent chunk also looks to be old insurers deciding that the Cheese Cake Factory has the right idea on choice offerings.
The ACA has a choice problem. Choice is valuable as it allows for finer matching between individual ideal points and available options. Choice is value subtracting as cognitive overload can also lead to dominated choices and rage quitting.
I am not sure what the best number of choices is, especially in an environment where there is no meaningful difference between some of the choices being offered, but I suspect that the value of better matching gets overwhelmed by the search costs at some point before 100 options are on the menu.
I wonder if information about local ACA choices is (or can be or should be) available for download. I can imagine an app that downloads a local ‘aca_choices.csv’ file and then ‘interviews’ a user about their preferences.
So, my husband is selling his business and we are moving to FL full time and need new health insurance. FloridaBlue is the ONLY option in Lee County. Fine. Whatever. But OMFG there are SEVEN PAGES of plan options. There’s not just a Bronze, Silver, Gold, and Platinum option but several or more of each, each slightly different, all confusing. I consider myself a reasonably intelligent individual able to do basic math, but OMFG they make it hard to choose — and none of the options are really all that great. Though they are less expensive than the expensive ($35K/year for a family of three + deductible and out of pocket costs) Oxford plan we’ve been on.
Someone remind me why we do not have automatic universal health care coverage from birth. (Oh, that’s right, Republicans and fear of a rise in taxes.)
@J.: There are 4 different insurers in Lee County.
Or this file: https://www.cms.gov/CCIIO/Resources/Data-Resources/Downloads/2021QHPPremiumsChoiceAppendix.xlsx
For the OP:
I don’t know what references you are looking at for overchoice. I do not know who has improved on Iyengar and Lepper 2000.
What I absolutely do not know is how any pressure could be brought to reduce the length of those listss.
Great post. BTW, this is known as “bounded rationality” in economics. (Or at least it is an obvious application of bounded rationality. It was first introduced by Nobel Prize winner Herbert Simon, I think.
Question: “..am not sure what the best number of choices is..”
Answer: Three( I like the rule of three)
I may be a little snarky, but I think once it gets above 3-5, our brain shuts down and it switches to easiest and quickest mode. I think choice in many environments is often mythologized like what Ezra Klein describes here:
“But populist reforms of this sort are often built atop a mythic version of the people, one that yearns to be involved in the ins and outs of every policy debate and shows up en masse to local planning meetings.” He goes on further, “Most of us just want the politicians we elect to do a good job so that we can live our lives. ” https://www.nytimes.com/2021/07/08/opinion/california-gavin-newsom-recall.html?action=click&module=Opinion&pgtype=Homepage
Most of us want a health plan that does a good job so we can live our lives.
@Victor Matheson: Herb Simon is probably my favorite economist
@Lobo: I think the optimal choice set is a bit larger than 3-5 especially if there is reliable, honest, fiduiciary responsible expert assistance to elicit preferences and trade-offs. But yeah, probably not 100