Working Paper: NBER ID: w25473
Authors: John Beshears; James J. Choi; David Laibson; Brigitte C. Madrian
Abstract: Home-delivered prescriptions have no delivery charge and lower copayments than prescriptions picked up at a pharmacy. Nevertheless, when home delivery is offered on an opt-in basis, the take-up rate is only 6%. We study a program that makes active choice of either home delivery or pharmacy pick-up a requirement for insurance eligibility. The program introduces an implicit default for those who don’t make an active choice: pharmacy pick-up without insurance subsidies. Under this program, 42% of eligible employees actively choose home delivery, 39% actively choose pharmacy pick-up, and 19% make no active choice and are assigned the implicit default. Individuals who financially benefit most from home delivery are more likely to choose it. Those who benefit least from insurance subsidies are more likely to make no active choice and lose those subsidies. The implicit default incentivizes people to make an active choice, thereby playing a key role in choice architecture.
Keywords: active choice; implicit defaults; health care; prescription delivery; decision-making
JEL Codes: D03; D04; D91; I13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| financial incentives (M52) | choice of home delivery (L87) |
| implicit default (Y20) | active choice (D87) |
| lack of insurance subsidies (G52) | no active choice (Y70) |
| active choice program (J68) | home delivery prescription uptake (L87) |