Using Behavioral Economics to Improve Medicare Plan Choice: A Randomized Experiment
*Names in bold indicate Presenter
The salience treatment yielded a statistically significant 11 percentage point increase in the likelihood of choosing a Medicare Advantage plan over the Original Medicare default. While the choice overload treatment produced a 6 percentage point increase in Medicare Advantage choice, this effect was statistically insignificant. Analyzing expected total costs by health status, both treatments yielded plan choices costing approximately $14 less per month than the control group.
An additional experimental arm combined the salience and choice overload treatments into a single intervention, and tested this with a sample of current Medicare enrollees. This combination-treatment generated a statistically significant 13 percentage point increase in the likelihood of switching to a new plan.
These results show that behavioral economics can be leveraged to shift consumer choice in Medicare, simply by redesigning plan information materials and without limiting respondents’ choice sets.