Inattention and Switching Costs as Sources of Inertia in Medicare Part D

• 成果类型: Article
• 署名作者: Heiss, Florian; McFadden, Daniel; Winter, Joachim; Wuppermann, Amelie; Zhou, Bo
• 署名单位: Heinrich Heine University Dusseldorf; University of California System; University of California Berkeley; University of Southern California; University of Munich; Martin Luther University Halle Wittenberg
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20170471
• 发表日期: 2021
• 页码: 2737-2781
• 关键词: health-insurance; plan choice; elderly evidence; adverse selection; prescription; inconsistencies; attention; MARKETS; choose; MODEL

摘要

Consumers' health plan choices are highly persistent even though optimal plans change over time. This paper separates two sources of inertia, inattention to plan choice and switching costs. We develop a panel data model with separate attention and choice stages, linked by heterogeneity in acuity, i.e., the ability and willingness to make diligent choices. Using data from Medicare Part D, we find that inattention is an important source of inertia but switching costs also play a role, particularly for-low-acuity individuals. Separating the two stages and allowing for heterogeneity is crucial for counterfactual simulations of interventions that reduce inertia.