The effects of offering health plan choice within employment-based purchasing groups

Employers may offer employees a choice of health plans either to promote competition among plans or to better cater to employee preferences for different types of products. This article examines whether the relationship between the availability of choice and insurance costs and coverage are consistent with these models of employer behavior. The results indicate that employers who offer choice have lower average premiums, primarily because employees are enrolled in less generous plans, and cover a greater proportion of workers than those who do not. The results are consistent with employers offering choice to accommodate diverse worker preferences. © The Journal of Risk and Insurance, 2010.

Duke Scholars

Author M. Kate Bundorf Sanford School of Public Policy