The Affordable Care Act is intended to bring new health insurance choices to American consumers but — unless we pay attention to the concept of choice architecture — consumers may not be able to identify the best choice for them.
Health insurance policies are complex products. The myriad and confusing features of health coverage make it hard for consumers to effectively compare their options. Web-based health plan chooser tools can help manage this wealth of information but only up to a point. And that utility comes at a price.
Behavioral economics has firmly established that we are not rational creatures who make utility maximizing decisions using all relevant information. What we really do is selectively ignore information in order to make it easier to get to a decision. Furthermore, what gets ignored and what is incorporated into our decision is profoundly influenced by how our choices are presented. The term “choice architecture” refers to how our choices are structured.
No health plan chooser tool can present plan choices in a neutral fashion because no website can emphasize all elements of a health plan equally. All ways of presenting choices must rely on a default initial view of the information. In the case of multi-dimensional health plan information, only some health plan attributes can be displayed in that initial view.
How Health Plan Chooser Tools Are Using Choice Architecture
Consumers Union commissioned a report that explores how health plan chooser tools in use today use choice architecture: ehealthinsurance, CMS plan finder, Massachusetts Connector, Consumers Checkbook/FEHBP and PBGH/CalPERS. We also incorporated a new tool, Enroll User Experience 2014 (UX 2014). This chooser tool has been specifically designed for health insurance exchanges, although it is not yet being used by any exchange.
The importance of the default display. Of critical importance are the design decisions that lead to the initial set of search results. Consumer behavior research tells us that, most of the time, consumers rely on the default display of information to make their selection. The tool experts agreed. PBGH/CALPERS reported that 93 percent of the time the default display of information is accepted by consumers with no customization on their part. More than 60 percent of users of the Checkbook site make their decisions without leaving the initial summary results screen.
Chances are consumers will choose from among the initial set of results, even if other options are available.
Three key design decisions influence the appearance of initial results:
- Are all choices displayed or have some been filtered out?
- How are plans sorted (which are listed first)?
- Which plan attributes are displayed and which require the user to scroll or click to see them?
A measure of plans’ true cost. A key commonality across several tools is the use of a health plan attribute called “Total Estimated Cost.” Although derived somewhat differently by each tool, this statistic estimates the total cost to the consumer of both the plan premium and an estimated out-of-pocket cost for services. By providing this measure on an apples-to-apples basis, the tools allow consumers to more easily compare the true cost of health plans. It also helps consumers incorporate information that is important (overall levels of cost-sharing) but would otherwise be ignored because it is too difficult for them to figure out on their own.
These four tools don’t just display information on total estimated cost, they also sort their initial health plan results by this figure – a key design decision affecting how consumers view their choices (Table 1, click to enlarge).
Table 1. Rules Determining The Initial Display Of Health Plans
How Health Plan Chooser Tools Differ From Each Other
Of perhaps even greater interest to policymakers and designers are areas where these sites differed. For example, another key dimension is how many health plan options are displayed among the initial results.
Some of our interviewees strongly emphasized the need to display all the plan choices initially, reflecting the fact that consumers will often rely on this first set of results. Others felt it helped the consumer to “filter” the options so that fewer were displayed. UX 2014, for example, uses upfront guided questions to filter the available plans. Ehealthinsurance shows only “best sellers” in their initial list of plan options. (Ehealthinsurance uses a proprietary algorithm to determine best seller status and the list only reflect carriers that contract with ehealthinsurance.)
The Massachusetts Connector is in many ways a special case. Within a coverage level, plans sold in their exchange have standard benefit designs. For example, plans sold in the Bronze-low coverage level have the same deductibles, copays etc. Given this standardization, one of the key pieces of information that consumer need to know is how their plan options differ by premium.
A third dimension choice architects need to keep in mind in what information is displayed about each health plan. The sites studied also varied significantly along this dimension, although all displayed premium information and many provided “total estimated cost” along with some cost-sharing detail.
All tools provided the ability for the consumer to change the default view to better suit their needs. However, what tool designers and those setting up criteria for these IT vendors need to keep in mind is the critical importance of the default view of information.
Given the acknowledged impact of choice architecture on consumer decision making, and the fact that HHS regulations allow for web-based brokers to also display health plan choices, policymakers, consumer advocates and website designers must come together to agree on the elements of choice architecture that are sufficiently protective of consumers.
Rather than debate the pros and cons of “liberal paternalism,” we must remember that there is no such thing as a neutral design when it comes to choice architecture. Furthermore, a reasonable standard has been established that can guide this work: set the default to the alternative most people prefer when making an informed, active choice, without time pressure. Consumer testing to date suggests that people are looking for the best value – that is, the most coverage they can get for a premium they can afford. We also know they need help figuring out how much coverage a plan offers, which is why “aids” like total estimated cost come in handy. We can fine tune this information by testing alternate designs with the millions of new consumers who will be newly enrolling in coverage in 2014.