A Family Decision-Making Model of Health Insurance Choices

In this paper we evaluate the health insurance choices of families enrolled in a directcontracting model developed by an employer purchasing alliance. This is the first study that has constructed an intra-family utility model of health plan choice. We construct individual utility functions by using stated preferences of individual family members and the attributes of different health benefit options. Conditional logit methods are used to estimate the weights for each family member’s utility in the family utility function. We find that families are sensitive to changes in the tax-adjusted, out-of-pocket premium. In addition, families who have specific primary care physicians and high importance ratings for seeing these primary care physicians prefer the option that offers a potentially larger selection of physicians, compared to families with low importance ratings. We do not find that families select health benefit options based on the preferences of children or family members with a chronic illness.