The Value Employees Place on Health Insurance Plans: A Discrete-Choice Experiment

Abstract

The federally-facilitated Health Insurance Marketplace-also known as the Health Insurance Exchange-was designed as a tool to help people purchase insurance plans, yet many Americans remain uninsured, partially due to rising premiums. One possible strategy to stabilize its premiums is to encourage healthier people to purchase their plans through the Marketplace instead of through their employers. This study examined the values that single adults with employer-based coverage place on health insurance plan attributes using a discrete-choice experiment (DCE). As part of an online survey, each respondent completed 28 paired comparisons trading off four attributes: source of coverage, plan type, monthly out-of-pocket premium, and quality of coverage. Based on our results (N = 2207), single employees slightly preferred their employer over the Marketplace as a source of coverage (0.726 odds ratio; p value < 0.01). Single employees would be willing to switch to the Marketplace for a US$25 reduction in monthly premiums. Preferred Provider Organization (PPO) plans were overwhelmingly preferred over all other plan types, especially compared to Fee-for-Service (FFS) plans (4.230 odds ratio; p value < 0.01). The predicted probability that a health insurance plan from the Marketplace would be chosen ranged from 42 to 43.7%. This study demonstrated that a US$25 subsidy or providing slightly more generous coverage (Bronze-Silver) would motivate employees to purchase PPO plans through the Marketplace, potentially improving its risk pooling, reducing employers' administrative burden, and enhancing labor mobility.