Choice Inconsistencies among the Elderly: Evidence from Plan Choice in the Medicare Part D Program
Jason Abaluck, Jonathan Gruber
American Economic Review · 2011 · Volume 101 · Issue 4
Abstract
We evaluate the choices of elders across their insurance options under the Medicare Part D Prescription Drug plan, using a unique dataset 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 percent higher if patients had all chosen rationally. (JEL D12, I11, J14)
Keywords
Consumer Economics: Empirical Analysis, Analysis of Health Care Markets, Economics of the Elderly, Economics of the Handicapped, Non-labor Market Discrimination
Enable JavaScript for citation tools and additional paper interactions.