Heterogeneity in Choice Inconsistencies among the Elderly: Evidence from Prescription Drug Plan Choice
This paper investigates the degree to which choice inconsistencies documented in the context of Medicare Part D plan choice vary across consumers and geographic regions. Our main finding is that there is surprisingly little variation: regardless of age, gender, predicted drug expenditures or the pre...
| Main Authors: | , |
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| Other Authors: | |
| Format: | Article |
| Language: | en_US |
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American Economic Association
2012
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| Online Access: | http://hdl.handle.net/1721.1/73122 https://orcid.org/0000-0002-9877-3065 |
| _version_ | 1811070193466605568 |
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| author | Abaluck, Jason Todd Gruber, Jonathan |
| author2 | Massachusetts Institute of Technology. Department of Economics |
| author_facet | Massachusetts Institute of Technology. Department of Economics Abaluck, Jason Todd Gruber, Jonathan |
| author_sort | Abaluck, Jason Todd |
| collection | MIT |
| description | This paper investigates the degree to which choice inconsistencies documented in the context of Medicare Part D plan choice vary across consumers and geographic regions. Our main finding is that there is surprisingly little variation: regardless of age, gender, predicted drug expenditures or the predictability of drug demand consumers underweight out of pocket costs relative to premiums and fail to consider the individualized consequences of plan characteristics; as a result, they frequently choose plans which are dominated in the sense that an alternative plan provides better risk protection at a lower cost. We find limited evidence that the sickest individuals had more difficulty with plan choice, and we document that much of the variation in potential cost savings across states comes from variation in choice sets, not variation in consumers ability to choose. |
| first_indexed | 2024-09-23T08:31:21Z |
| format | Article |
| id | mit-1721.1/73122 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T08:31:21Z |
| publishDate | 2012 |
| publisher | American Economic Association |
| record_format | dspace |
| spelling | mit-1721.1/731222022-09-23T12:46:19Z Heterogeneity in Choice Inconsistencies among the Elderly: Evidence from Prescription Drug Plan Choice Abaluck, Jason Todd Gruber, Jonathan Massachusetts Institute of Technology. Department of Economics Abaluck, Jason Todd Gruber, Jonathan This paper investigates the degree to which choice inconsistencies documented in the context of Medicare Part D plan choice vary across consumers and geographic regions. Our main finding is that there is surprisingly little variation: regardless of age, gender, predicted drug expenditures or the predictability of drug demand consumers underweight out of pocket costs relative to premiums and fail to consider the individualized consequences of plan characteristics; as a result, they frequently choose plans which are dominated in the sense that an alternative plan provides better risk protection at a lower cost. We find limited evidence that the sickest individuals had more difficulty with plan choice, and we document that much of the variation in potential cost savings across states comes from variation in choice sets, not variation in consumers ability to choose. National Institute on Aging (Grant R01 AG031270) 2012-09-24T17:48:18Z 2012-09-24T17:48:18Z 2011-05 Article http://purl.org/eprint/type/JournalArticle 0002-8282 1944-7981 http://hdl.handle.net/1721.1/73122 Abaluck, Jason, and Jonathan Gruber. “Heterogeneity in Choice Inconsistencies Among the Elderly: Evidence from Prescription Drug Plan Choice.” American Economic Review 101.3 (2011): 377–381. © 2011 AEA https://orcid.org/0000-0002-9877-3065 en_US http://dx.doi.org/10.1257/aer.101.3.377 American Economic Review Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use. application/pdf American Economic Association American Economic Association |
| spellingShingle | Abaluck, Jason Todd Gruber, Jonathan Heterogeneity in Choice Inconsistencies among the Elderly: Evidence from Prescription Drug Plan Choice |
| title | Heterogeneity in Choice Inconsistencies among the Elderly: Evidence from Prescription Drug Plan Choice |
| title_full | Heterogeneity in Choice Inconsistencies among the Elderly: Evidence from Prescription Drug Plan Choice |
| title_fullStr | Heterogeneity in Choice Inconsistencies among the Elderly: Evidence from Prescription Drug Plan Choice |
| title_full_unstemmed | Heterogeneity in Choice Inconsistencies among the Elderly: Evidence from Prescription Drug Plan Choice |
| title_short | Heterogeneity in Choice Inconsistencies among the Elderly: Evidence from Prescription Drug Plan Choice |
| title_sort | heterogeneity in choice inconsistencies among the elderly evidence from prescription drug plan choice |
| url | http://hdl.handle.net/1721.1/73122 https://orcid.org/0000-0002-9877-3065 |
| work_keys_str_mv | AT abaluckjasontodd heterogeneityinchoiceinconsistenciesamongtheelderlyevidencefromprescriptiondrugplanchoice AT gruberjonathan heterogeneityinchoiceinconsistenciesamongtheelderlyevidencefromprescriptiondrugplanchoice |