Choice in public health insurance: evidence from West Virginia medicaid redesign

This paper examines the factors that affect plan choice in a public health insurance program. West Virginia recently redesigned its state Medicaid program, offering members a choice between two plans--a basic plan and an enhanced plan. The latter plan includes more benefits, but requires additional agreements intended to lead patients to adopt healthier lifestyles. We use administrative claims records and survey data to examine plan choice. Our results yield convincing evidence that members with higher health care utilization patterns are more likely to enroll in the enhanced plan, but other factors such as education are also important.