Costs, Not Physician Choice, Most Important Factor In Individual Health Coverage Plan Selection

May 18, 2015 | Publication

A report released today by the Center for Healthcare Research & Transformation (CHRT) shows that individuals selecting health coverage in Michigan are making their buying decision based on costs more than choice of physicians and network size.

The report, “Health Plan Selection: Factors Influencing Michiganders’ Choice of Health Insurance,” shows that consumers purchasing individual health insurance coverage were more than twice as likely to report that premium cost was very important in selecting a health plan as they were to report that the number of in-network physicians was a very important factor in their decision.

“We have known from consumer behavior that cost is very important, particularly when consumers are choosing and paying for health plans themselves. But, this study tells us more clearly just how much more important cost is in today’s marketplace than network size,” says Marianne Udow-Phillips, director of CHRT.

Highlights of report include:

  • 92 percent of respondents with individually purchased insurance reported that at least one cost measure (premium, deductible, co-pay or co-insurance) had been a very important factor in their selection of a health plan.
  • 41 percent of those with individually purchased health insurance—less than those with employer-sponsored insurance (50 percent)—noted that the physician network was a very important factor in their decision-making.
  • Nearly 20 percent of those with individual coverage changed primary care physicians as a result of their choice of plans.

In 2014, the first open enrollment for individual coverage, more than 272,000 Michigan residents enrolled in individual health coverage, choosing from 60 non-catastrophic plans. In most cases, consumers had a wide choice of plans representing different provider networks and levels of cost sharing.

“The fact that consumers in the individual marketplace are willing to change their primary care physician relationship based on price and select a health plan with a narrow provider network with lower costs is significant,” says Udow-Phillips. “Providers of care will want to pay close attention to these results as they think about which health plan products to participate in.”

In a separate CHRT survey, Michigan’s primary care physicians reported having capacity to see new patients, making them more willing to accept Medicaid patients and more likely to consider joining networks with lower negotiated payments in order to gain access to more patients.

The CHRT analysis has important insights for providers, payers and employers alike, says Udow-Phillips, who is a member of the U-M Institute for Healthcare Policy and Innovation and holds a faculty appointment in the U-M School of Public Health.

“For providers, consumer loyalty may not be as strong a factor in keeping patients as it once was, as they are more willing to shift providers for lower price. For employers, they may be able to offer more narrow-network plans, as consumers are more accepting of less choice in exchange for lower premiums, deductibles and out of pocket costs. For insurers, plan design and the ability to develop narrow quality networks are essential.”

CHRT’s analysis is based on results from a series of questions CHRT added to the Michigan State University Institute for Public Policy and Social Research (IPPSR) quarterly State of the State Survey conducted via landline and cell phones between September and November 2014. The margin of error for the sample of 1,002 Michigan adults was ±3.9 percent. The IPPSR State of the State Survey methodology can be found at: http//

This survey brief is a part of the Cover Michigan Survey 2014 series. Future briefs will cover other aspects of health care in Michigan using the 2014 survey data. Read the full report, “Health Plan Selection: Factors Influencing Michiganders’ Choice of Health Insurance,” at chrt.test.