Quality information and consumer health plan choices

This paper presents an empirical analysis of the effects of providing information about plan quality on consumers' health plan choices in a private employment setting. Analysis of plan switching behavior suggests that the provision of quality information had a small, but significant effect on consumer plan choices. Employees were more likely to switch from plans with lower reported quality. Cross-sectional analyses of plan choice indicate that reported quality played a role in plan selection even after controlling for other health plan characteristics commonly associated with plan choice. The age of the policyholder and the type of policy purchased moderated the effects of plan characteristics on plan choice in ways that may be consequential for adverse selection. (C) 2002 Published by Elsevier Science B.V.