The effect of report cards on consumer choice in the health insurance market.
Wedig GJ & Tai-Seale M.
J Health Econ. 21(6):1031-48.
2002-11-01
Abstract
We test the effect of report cards on consumer choice in the HMO market.
Federal employees were provided with report cards on a limited basis in 1995 and then on a widespread basis in 1996.
Exploiting this natural experiment, we find that subjective measures of quality and coverage influence plan choices, after controlling for plan premiums, expected out-of-pocket expenses and service coverages. The effect is stronger within a small sample of new hires compared to a larger sample of existing federal employees. We also find evidence that report cards increase the price elasticity of demand for health insurance.
Research topics
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