Satisficing is choosing a solution that meets minimally defined criteria because the search costs of finding the optimal solution to a problem are too high and we are humans with bounded rationality and limited focus and attention spans. A common case of satisficing is finding and taking the first parking space seen at the mall on December 23rd. Sure it might be half a mile from the entrance and a mile from the one store you really need to get to and there might be a spot three spaces from the entrance that will be available just as you drive by but the spot is good enough so you take it.
What does this have to do with health insurance?
In my personal mental model of the firm, I believe that there are very few problems that are optimized and many problems that are satisficed. This includes a subset of problems that have the trappings of an optimization problem but there are numerous good enough assumptions built into the model so the optimization is either a GIGO optimization or more likely a good enough local near maximization instead of a universal optimization. Big company wide strategic decisions are likely to be nearly optimized while day to day decision making is often an accretion of satisficing decisions within multi-objective cross cutting frameworks of constraints.
This includes Human Resources and Employee Benefits. Under a strict optimization strategy, everyone would be paid their marginal value. Everyone would receive just enough of a total compensation package to match their actual contributions to the firm. That does not happen. There are some bullshit artists who have talked their way up. There are some people who have not been promoted for years and as soon as they leave for the competitor at the other end of town two entire departments fall apart because they were the off the org chart glue that made all of the kludges work smoothly.
Health insurance and benefits is also a problem. Typically the constraints of a problem space from the point of view of the benefit manager will be a fairly hard upper boundary on cost, a moderately hard constraint to not piss off very senior management by making their lives or more importantly their spouses’ lives more difficult, a softer constraint of keeping the offering vaguely competitive with peer offerings. Those will be the formal constraints. There can also be informal constraints. One of the big ones is keeping the number of people yelling at the benefit manager throughout the year to a minimum and making sure that people occassionally talk to the benefit manager when there is not a problem with benefits.
And this is where satisficing comes in.