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Using contingent choice methods to assess consumer preferences about health plan design



American insurers are designing products to contain healthcare costs by making consumers financially responsible for their choices. Little is known about how consumers will view these new designs. Our objective is to examine consumer preferences for selected benefit designs.


We used the contingent choice method to assess willingness to pay for six health plan attributes. Our sample included subscribers to individual health insurance products in California, US. We used fitted logistic regression models to explore how preferences for the more generous attributes varied with the additional premium and with the characteristics of the subscriber.


High quality was the most highly valued attribute based on the amounts consumers report they are willing to pay. They were also willing to pay substantial monthly premiums to reduce their overall financial risk. Individuals in lower health were willing to pay more to reduce their financial risk than individuals in better health.


Consumers may prefer tiered-benefit designs to those that involve overall increases in cost sharing. More consumer information is needed to help consumers better evaluate the costs and benefits of their insurance choices.

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This research was carried out under grant no. 01-1520 from the California HealthCare Foundation (CHCF). Any views expressed herein are solely those of the authors and no endorsement by RAND or the CHCF is intended or should be inferred. The authors are grateful to the RAND Survey Group for carrying out the survey. We also thank Al Crego for programming assistance, the Actuarial Research Corporation for providing actuarial estimates of the expected benefits of some of the features we studied and the three participating carriers for assisting us in obtaining the sample used in this study. ## The authors do not have a proprietary, financial or professional interest of any kind that could be construed as influencing the content of this manuscript.

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Correspondence to M. Susan Marquis.

Appendix Refer to Tab5

Appendix Refer to Tab5

Table AI

Logistic regression for likelihood of choosing the more generous attributea

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Marquis, M.S., Buntin, M.B., Kapur, K. et al. Using contingent choice methods to assess consumer preferences about health plan design. Appl Health Econ Health Policy 4, 77–86 (2005).

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  • Cost Sharing
  • Contingent Choice
  • Benefit Design
  • Monthly Premium
  • Premium Difference