USE CASE: Understanding How Individuals Choose Health Insurance Plans

Harvard Medical School’s Department of Health Care Policy works to improve the health of the public through comprehensive health policy research.

Project Summary: The requestors aimed to use CO APCD data to understand how individuals determine which health insurance plan to purchase in three markets: the Colorado ACA Marketplace, Medicare Advantage, and Medicaid Managed Care. Specifically, they were interested in adverse selection, the tendency of sicker consumers to choose more expensive plans offering more generous coverage while healthy people choose lesser coverage with a lower price tag. Adverse selection results in higher costs for insurers and consumers while creating an imbalance in the insurance marketplace.

Benefit to Colorado: By understanding the consequences of adverse selection and how insurance plans can protect themselves, this project can help Colorado take necessary steps to ensure a healthy insurance marketplace.