Marketplace Plan Choice: How Important Is Price?

An Analysis of Experiences in Five States

Price largely drives consumer choice for health insurance coverage.

The Issue
The report draws on plan selection data released from state marketplaces in California, Rhode Island, New York, Connecticut, and Maryland. 

Key Findings

  • In 2015, 80 percent of consumers selected plans in the two least-expensive tiers (out of four), but significant numbers did not choose the cheapest plan within each tier.

  • The majority of consumers were highly sensitive to monthly premium costs when selecting a plan.

Conclusion
The fact that a significant minority chose more expensive plans suggests that other factors like existing customer satisfaction, perceived quality differences, brand name recognition, and other concerns also influence consumer choice.

About the Urban Institute
The nonprofit Urban Institute is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable, and strengthen the effectiveness of the public sector. Visit the Urban Institute’s Health Policy Center for more information specific to its staff and its recent research.