Managed Care Weekly Digest


Study results from M.S. Marquis and colleagues in the area of health insurance published



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2008 JAN 14 -- In this recent report, researchers in the United States conducted a study "To evaluate the role of health plan benefit design and price on consumers' decisions to purchase health insurance in the nongroup market and their choice of plan. Administrative data from the three largest nongroup insurers in California and survey data about those insured in the nongroup market and the uninsured in California."

"We fit a nested logit model to examine the effects of plan characteristics on consumer choice while accounting for substitutability among certain groups of products. Product choice is quite sensitive to price. A 10 percent decrease in the price of a product would increase its market share by about 20 percent. However, a 10 percent decrease in prices of all products would only increase overall market participation by about 4 percent. Changes in the generosity of coverage will also affect product choice, but have only small effects on overall participation. A 20 percent decrease in the deductible or maximum out-of-pocket payment of all plans would increase participation by about 0.3-0.5 percent. Perceived information search costs and other nonprice barriers have substantial effects on purchase of nongroup coverage. Modest subsidies will have small effects on purchase in the nongroup market. New product designs with higher deductibles are likely to be more attractive to healthy purchasers, but the new benefit designs are likely to have only small effects on market participation," wrote M.S. Marquis and colleagues.

The researchers concluded: "In contrast, consumer education efforts have a role to play in helping to expand coverage."

Marquis and colleagues published their study in Health Services Research (The role of product design in consumers' choices in the individual insurance market. Health Services Research, 2007;42(6 Part 1):2194-2223).

For additional information, contact M.S. Marquis, RAND Corp., 1200 S Hayes St., Arlington, VA 22202, USA.

Publisher contact information for the journal Health Services Research is: Blackwell Publishing, 9600 Garsington Rd., Oxford OX4 2DQ, Oxon, England.

Keywords: United States, Arlington, Health Insurance, Managed Care.

This article was prepared by Managed Care Weekly Digest editors from staff and other reports. Copyright 2008, Managed Care Weekly Digest via NewsRx.com.