Document Type

Article

Publication Date

4-6-2021

Abstract

We introduce a new experimental approach to measuring the effects of health insurance policy alternatives on behavior and health outcomes over the life course. In a virtual environment with multi-period lives, subjects earn virtual income and allocate spending, to maximize utility, which is converted into cash payment. We compare behavior across age, income and insurance plans—one priced according to an individual’s expected cost and the other uniformly priced through employer-implemented cost sharing. We find that 1) subjects in the employer-implemented plan purchased insurance at higher rates; 2) the employer-based plan reduced differences due to income and age; 3) subjects in the actuarial plan engaged in more health-promoting behaviors, but still below optimal levels, and did save at the level required, so did realize the full benefits of the plan. Subjects had more difficulty optimizing choices in the Actuarial treatment, because it required more long term planning and evaluating benefits that compounded over time. Contrary, to model predictions, the actuarial priced insurance plan did not increase utility relative to the employer-based plan.

Comments

This article was originally published in PLoS ONE, volume 16, issue 4, in 2021. https://doi.org/10.1371/journal.pone.0248784

Peer Reviewed

1

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The authors

Creative Commons License

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 License.

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