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March 23, 1994

Do Health Care Premiums Affect Patient Enrollment?

Author Affiliations

Stanford University Stanford, Calif

JAMA. 1994;271(12):902. doi:10.1001/jama.1994.03510360026018

To the Editor.  —While I concur with many of the assertions of Rice et al1 in their essay identifying weaknesses inherent in the Jackson Hole approach to health care, one of their most important arguments is, in my experience, false. They state, "[A]lthough consumers would be expected to respond somewhat to premium differences when choosing their health plans, the magnitude of this response does not appear to be particularly great," and go on to conclude that "relying on enrollees' cost consciousness is a fundamentally weak strategy." As part of a study I have done, I was provided data by the Department of Medical Economics of the Northern California Kaiser Permanente Health Care Plan (KP) for the period 1985 to 1989. This was a period in which KP experienced dramatic swings in membership, going from a net membership loss in the third quarter of 1985 to an increase of more

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