Association for Public Policy Analysis & Management

In this paper we investigate the existence of health care choice inertia among population not previously studied, low income individuals choosing among Medicaid managed care plans. Using administrative Medicaid data for 2010-2013 from the Kentucky Medicaid program, we observe the extent to which enrollees opt out of their assigned plan upon initial assignment and during the next open enrollment period. Preliminary results suggest that the auto assignment process employed by Kentucky Medicaid generates a considerable amount of plan inertia – more than half of the enrollees in our sample auto-assigned to what is arguably the worst of three plans remain enrolled in that plan even after the second open enrollment period. We then assess the implications for enrollee health care utilization using detailed Medicaid encounter micro-data.