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. 2011 Jun 1;101(4):1180-1210.
doi: 10.1257/aer.101.4.1180.

Choice Inconsistencies Among the Elderly: Evidence from Plan Choice in the Medicare Part D Program

Jason Abaluck  1 , Jonathan Gruber
Affiliations

Choice Inconsistencies Among the Elderly: Evidence from Plan Choice in the Medicare Part D Program

Jason Abaluck et al. Am Econ Rev. .

Abstract

We evaluate the choices of elders across their insurance options under the Medicare Part D Prescription Drug plan, using a unique data set of prescription drug claims matched to information on the characteristics of choice sets. We document that elders place much more weight on plan premiums than on expected out of pocket costs; value plan financial characteristics beyond any impacts on their own financial expenses or risk; and place almost no value on variance reducing aspects of plans. Partial equilibrium welfare analysis implies that welfare would have been 27% higher if patients had all chosen rationally.

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Figures

Figure 1
Figure 1
Histogram of cost savings from switching to lowest cost plan
Figure 2
Figure 2
Average mean and standard deviation for each PDP plan in CA
Figure 3
Figure 3
Percent Choosing Donut Hole Coverage and Added Cost by Expenditure Quantile
See this image and copyright information in PMC

Comment in

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