Choosing health insurance is TOUGH!
It uses a complex jargon.
People are asked to predict rare events and combine probabilities and use cases.
There are many distinctive elements of choice whose weight varies between and within people over time.
And that is the best case choice scenario.
We then often layer in administrative complexities on top of that. I’ve been doing a lot of work on the administrative burdens of health insurance choice over the past few years. Our big finding from our zero-premium paper is that zero is not particularly different in shaping what choices people make but it matters a lot on enrollment as it eliminates a friction point. Other researchers have found that the process of enrolling and maintaining enrollment is a challenge.
Massachusetts runs their own ACA marketplace, the Masschusetts Health Connector. The state is trying to figure out where the pain points are and then coming up with solutions to minimize those pain points:
@Cutler_econ @onceuponA Administrative costs are a burden to all. They raise costs and distort behaviors. Kudos to @HealthConnector for efforts (w/ @ManattHealth to reduce them. See https://t.co/4jRwKgoOzH pic.twitter.com/3ZhDttlWLF
— Michael Chernew (@Michael_Chernew) November 28, 2022
I know several other states are trying to do this as well. This is one of the advantages of running a state based marketplace. The state can customize their work flow and the process much more readily than Healthcare.gov. Healthcare.gov is also attempting to minimize burdens as a an enrollment boosting measure that does not need Congressional action. However, states should have far cleaner long term incentives as it is a way to get federal money into the state while covering more people without spending state general fund dollars. I expect that the states that run their own markets, blue and red, will be more effective at iterating and experimenting to reduce burdens over the next couple of years.