Health insurance under competition: would people choose what is expected?

To determine relative preferences for different cost-sharing options, we asked a 17% random sample of 2,754 nonunion employees to compare health insurance policies that differed in the level of 1) deductible amount, 2) coinsurance rate, 3) coinsurance limit, 4) maximum liability, and 5) price. Using conjoint analysis, we derived preference curves for each of the five components and measured preferences for the compromise between more coverage and the corresponding price increase. In contrast to other studies, our findings suggest that under fair market prices, respondents would choose policies with greater coverage for catastrophic illness, and they would as likely choose cost-sharing policies that contain incentives to reduce utilization as they would choose policies without these incentives.