The Impact of Decision Aids on Health Insurance Selection

Suboptimal health insurance choices impose substantial welfare costs on households, with enrollment patterns frequently violating financial dominance despite stakes exceeding thousands of dollars annually. We use a randomized field experiment with public university employees during open enrollment to evaluate whether decision aids that clarify these financial consequences affect enrollment patterns. The setting features a financially dominant high-deductible plan that saves money for all workers regardless of health spending, with typical savings around $2,000 annually, and a requirement to make an active choice confirming plan selection. We find that decision aids improve cost recognition by 22 percentage points. Yet they increase intended enrollment in the high-deductible plan by 6 percentage points and actual enrollment by only 2 percentage points, revealing substantial attenuation from understanding to behavior. Survey responses reveal that concerns about managing a health savings account, aversion to out-of-pocket costs, and reluctance to change from familiar plans limit the translation into enrollment. Treatment effects are largest among workers with limited prior plan engagement and vary substantially by liquidity constraints.