Peter Ubel: Improving the Design of Health Insurance Exchanges

Dr. Peter Ubel, HSM Associate Faculty Director, and colleagues discuss the impact of the layout of the online health insurance exchanges on consumer choices by employing behavioral science methods and design architecture. They argue that “powerful connotative labels” and tables with an overwhelming amount of details can confuse shoppers into choosing the health insurance plan that does not best suit their needs. Ubel and his co-authors performed two experiments, one sampling participants on public buses in Durham, NC, and another conducting a survey that listed premium price differences either on a weekly or monthly rate. In the former, they found that most participants chose the “gold” plan, regardless of its description. In the latter, participants chose higher-premium, lower-deductible plans when the differences between plans was presented to them weekly rather than monthly ($24 difference/week sounds cheaper than $104 difference/month). The article suggests that instead of using well-known labels to distinguish between plans, designers should help shoppers lay out possible scenarios so they can better estimate expenses and evaluate how often they will make use of their insurance plan.

Read more in “ 3.0 – Behavioral Economics and Insurance Exchanges” The New England Journal of Medicine

Ubel, P., Comerford, D., & Johnson, E. (2015). 3.0 – Behavioral Economics and Insurance Exchanges. The New England Journal of Medicine, 372(8), 695-698. DOI:10.1056/NEJMp1414771