Designing and regulating health insurance exchanges: Lessons from Massachusetts

Keith M. Marzilli Ericson*, Amanda Starc

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

7 Scopus citations


The Massachusetts health care reform provides preliminary evidence on the function of health insurance exchanges and individual insurance markets. This paper describes the type of products consumers choose and the dynamics of consumer choice. Evidence shows that choice architecture, including product standardization and the use of heuristics (rules of thumb), affects choice. In addition, while consumers often choose less generous plans in the exchange than in traditional employer-sponsored insurance, there is considerable heterogeneity in consumer demand, as well as some evidence of adverse selection. We examine the role of imperfect competition between insurers, and document the impact of pricing and product regulation on the level and distribution of premiums. Given our extensive choice data, we synthesize the evidence of the Massachusetts exchange to inform the design and regulation on other exchanges.

Original languageEnglish (US)
Pages (from-to)327-338
Number of pages12
JournalInquiry (United States)
Issue number4
StatePublished - 2012

ASJC Scopus subject areas

  • Health Policy


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