CONSUMER HEALTH PLAN CHOICE - CURRENT KNOWLEDGE AND FUTURE-DIRECTIONS

A keystone of the competitive strategy in health insurance markets is the assumption that ''consumers'' can make informed choices based on t he costs and quality of competing health plans, and that selection eff ects are not large. However, little is known about how individuals use information other than price in the decision making process. This rev iew summarizes the state of knowledge about how individuals make choic es among health plans and outlines an agenda for future research. We f ind that the existing literature on health plan choice is no longer su fficient given the widespread growth and acceptance of managed care, a nd the increased proportion of consumers' income now going toward the purchase of health plans. Instead, today's environment of health plan choice requires better understanding of how plan attributes other than price influence plan choice, how other variables such as health statu s interact with plan attributes in the decision making process, and ho w specific populations differ from one another in terms of the sensiti vity of their health plan choices to these different types of variable s.