"Choose the Plan That’s Right for You": Choice Devolution as Class-Biased Institutional Change in U.S. Employer-Sponsored Health Insurance

Adam Goldstein, James Franklin Wharam

Sociological Science May 16, 2022
10.15195/v9.a10


This study examines the distributional consequences of U.S. employers’ efforts to devolve responsibility for managing their employees’ medical insurance risk. The logic of consumer choice has increasingly come to dominate insurance benefit design, requiring that employees learn to be their own actuaries. We ask, to what extent does the individuation of choice (between insurance plans with disparate levels of cost-sharing) alter the social stratification of out-of-pocket (OOP) medical expenditure burdens across socioeconomic status class strata? Our analysis draws on an insurance claims database from a large multi-employer commercial insurer, which includes information on plan offerings and realized OOP expenditure burdens for more than 37 million persons from 2002 to 2012. Consistent with expectations, the results of pooled difference-in-difference event study models reveal that transitions to devolved choice result in modestly greater increases in realized OOP burden among lower socioeconomic status enrollees, compared with the growth among higher-status enrollees. However, the magnitude of the increase in the between-class expenditure burden disparity is small in substantive terms.
Creative Commons LicenseThis work is licensed under a Creative Commons Attribution 4.0 International License.

Adam Goldstein: Princeton University School of Public and International Affairs
E-mail: amg5@princeton.edu

James Franklin Wharam: Duke University Department of Medicine and Duke-Margolis Center for Health Policy
E-mail: james.wharam@duke.edu

Acknowledgments:This study was generously supported by the Robert Wood Johnson Foundation’s Scholars in Health Policy Research Program. The authors thank Robert LeCates and Fang Zhang for sharing data and assistance with variable derivation. Katherine Swartz, Paul Starr, Jeremy Cohen, and Simone Schneider provided helpful comments on earlier drafts. The study benefited from the feedback of audiences and participants at the Robert Wood Johnson Foundation Scholars in Health Policy Research Annual Meeting, the American Sociological Association Annual Meeting, and Princeton’s Center for the Study of Social Organization Seminar.

  • Citation: Goldstein, Adam, and James Franklin Wharam. 2022. “‘Choose the Plan That’s Right for You’: Choice Devolution as Class-Biased Institutional Change in U.S. Employer-Sponsored Health Insurance.” Sociological Science 9: 221-251.
  • Received: January 3, 2022
  • Accepted: March 21, 2022
  • Editors: Arnout van de Rijt, Cristobal Young
  • DOI: 10.15195/v9.a10


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