"People want advice, they want leadership," said Lang. "And it's pretty hard."
The people who are most likely to make bad decisions seem to be the least likely to be able to afford them. A recent study in the Netherlands, which offers insurance to everyone through an Obamacare-like market, found that only 5 percent of Dutch customers did a better job choosing an ideal plan than choosing a plan randomly. And the people in that top 5 percent usually had college degrees and jobs in technical fields. People with less education and lower incomes, who tend to be in poorer health, are very likely to opt for a plan that costs them more to cover their health care – a situation where they may save on the drugs or procedures they need.
But well-trained Dutch specialists also had problems. People who worked in the insurance industry with an advanced degree made good choices about 30 percent of the time. And only about 40 percent of trained statisticians – the best performing group – chose good plans for their needs.
In the United States, a working paper found that many professionals who help people choose health insurance are also poor at choosing plans and far worse than a computer algorithm.
"These people who are supposed to get the market going can't do that at all," said Jonathan Kolstad, associate professor of economics at the University of California at Berkeley, who co-authored both studies. Professor Kolstad said the work made him rethink why we value the health insurance markets so highly when they are so difficult to use.
Choosing a plan is difficult, but a few simple guidelines can help a little. It is helpful to know if a particular plan covers the doctors and hospitals you use, for example. And if you're willing to take more financial risks, you may prefer a plan with a higher deductible and lower premiums. As you evaluate more predictable expenses, a lower deductible plan may work better. However, actual health needs and people's fine print vary so much that these guides can mislead you. The literature shows that it is not uncommon for people to choose a plan during the year that costs them $ 1,000 more than the best plan.
Most plan selection research deals with the financial design of the plan. Researchers can look at the options, then figure out what health services people end up using, and determine the total cost of various decisions. This approach leaves out some other elements of health plans, such as the choice of doctors or whether the company provides good customer service. The study of brokers found that people whose plan selection was assisted by the computer program were less likely to switch plans in the next year than people who followed the broker's advice unassisted, a sign that they were more satisfied with the overall package.
But what is the alternative to choosing? Amanda Starc, a professor of management at Northwestern University, said there was evidence that people really wanted things other than health insurance. About a third of those 65 and over are currently enrolled on Medicare Advantage private plans. That proportion is large enough to indicate that many would just be less satisfied with their choice of state Medicare.