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So Many Medicare Plans, People Want to Stay Put!

Why choice overload is making Obamacare popular

Republicans and Democrats agree that Medicare is in trouble — that if its costs keep rising faster than inflation, we will face insurmountable federal budget deficits. They also agree that the problem can be fixed. But that is where their agreement comes to an end, and where the Democrats hold a psychological advantage over Republicans — because the more Medicare fixes the experts and pundits and, yes, Republican politicians float in front of the general public, the more overwhelmed people will be by the complexity of these alternatives. Once overwhelmed, they will become more likely to stick with what we have, for better or worse. That means they will be drawn towards Obamacare.

By now, I expect most of you have heard of Sheena Iyengar’s famous jam study. She presented six flavors of jam in a grocery store display table and discovered that many people wanted to buy one of the jams. But when she presented 24 flavors of jam, customers walked away, because they were so overloaded by the choices that they stuck with the status quo, which in this case meant keeping the cart rolling down towards the potato chip aisle.

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When Mitt Romney chose Paul Ryan to be his running mate, the punditocracy understandably focused on his controversial Medicare plan. But of course, there was no single Ryan plan. Instead, there were several different plans, the details of which no doubt eluded even most political reporters. Then again, the general public was quickly told that Ryan’s plans didn’t matter anyway because Romney had a plan of his own, a vague plan of course, but one that was clearly not the same as any of Ryan’s.

All of these competing plans threaten to create choice overload, and cause people to walk away from Romney’s plan like grocery customers fleeing a crowded display table.

Romney is trying to counter this problem by raising concerns about Obama’s Medicare plan, especially by trying to betray Obama as making huge spending cuts in the program. In reality, Obama only plans to slow the growth of Medicare spending, a goal that Romney no doubt shares. Meanwhile, Romney lets little bits of his Medicare plan spill out to the general public, further confusing them about which plan is the real Romney plan and what that means for the program.

Don’t be surprised if all this uncertainty about Medicare — competing plans and alternative proposals — causes the public to embrace the status quo. And in this case, the status quo means Obama’s Medicare plan. Unless Romney can settle on a single alternative to Obama’s plan, one with enough specificity to allay people’s fears of uncertainty, you can expect Medicare and maybe even Obamacare to be a net positive for the Obama campaign. 

Who would have guessed?

 

** Previously posted on Forbes **

Peter Ubel, M.D., author of Critical Decisions and Free Market Madness, is a physician, behavioral scientist, and Professor of Business and Public Policy at Duke University.

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