TY  - JOUR
AU  - Abaluck, Jason
AU  - Gruber, Jonathan
TI  - Evolving Choice Inconsistencies in Choice of Prescription Drug Insurance
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 19163
PY  - 2013
Y2  - June 2013
DO  - 10.3386/w19163
UR  - http://www.nber.org/papers/w19163
L1  - http://www.nber.org/papers/w19163.pdf
N1  - Author contact info:
Jason Abaluck
Yale School of Management
Box 208200
New Haven, CT 06520-8200
E-Mail: jason.abaluck@yale.edu

Jonathan Gruber
Department of Economics, E52-434
MIT
77 Massachusetts Avenue
Cambridge, MA 02139
Tel: 617/253-8892
Fax: 617/253-1330
E-Mail: gruberj@mit.edu
AB  - We study choice over prescription insurance plans by the elderly using government administrative data to evaluate how these choices are made and evolve over time. We find that there is large "foregone savings" from not choosing the lowest cost plan that has grown over time. We develop a structural framework that allows us to exactly decompose the changes in "foregone welfare" from inconsistent choices into supply and demand side factors. We find that foregone welfare increases over time due primarily to supply-side factors such as premiums and out-of-pocket costs; we estimate little learning at either the individual or cohort level.
ER  -