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HEALTH INSURANCE INDUSTRY ENFORCEMENT ACT OF 2009

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From the perspective of behavioral economics, rationality is bounded by asymmetrical preferences. Consider, for example, status quo bias. Samuelson and Zeckhauser (1988) reported that when Harvard University changed some of the health insurance options it offered employees, newly hired personnel were more likely to enroll than were people already on the university’s payroll; those employees generally chose to keep their current plans. The appeal of the status quo can be explained, in part, by the concept of loss aversion. People appear to make decisions relative to a reference point—often, the status quo....

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