Tens of thousands of people flocked to the new online marketplace this past week, in hopes of signing up for coverage that could kick in as early as New Year's Day. The federal website is working better, but as more people get through the initial application process, they may then face a possibly daunting decision: which of all the plans should they choose?

An Affordable Care Act 'promise': competition

Here's the upbeat way of looking at it, articulated by Joanne Grossi, Region III director of the U.S. Department of Health and Human Services: "The average Pennsylvanian will have 126 plans to choose from."

It's more like two dozen around Philadelphia.

"We wanted there to be lots of competition," says Grossi. "It's what we always promised about the Affordable Care Act. People will have lots of choices to make about what works best for both their health status and their financial status"

But are more choices always better?

Paralyzed by options

Some experts worry that without guidance, many people won't choose the option that's right for them.

"Why don't they just make it simple?" laments Barry Schwartz, a Swarthmore professor who's written extensively about choice. Schwartz says behavioral research suggests that an abundance of options may actually paralyze people's decision making process. He saw this when Medicare Part D launched several years ago, offering dozens of drug plans to seniors, without any way to compare them.

"It was a fiasco even though people were better off with any plan verses nothing," says Schwartz, adding that the government has largely fixed those initial design flaws.

When we can't figure out how to evaluate options, even if any one of them is better than choosing none, we often do nothing, Schwartz says. If we do choose, we often choose poorly.

"Chances are what people will do when there are a lot of options, is they'll try to simplify the decision and they'll choose on the basis of what's easiest to evaluate," says Schwartz. "Unfortunately what's easiest to evaluate is probably not what's most important to evaluate."

Picking health insurance, Schwartz says, also demands something insurance companies do well but most individuals do horribly: assessing personal risk.

"Think about how complicated that is. What's the probability you're going to have a serious illness, you're going to be hospitalized, in a car accident? How to calculate this, it's really daunting."

Tools for even the savviest among us

Eric Johnson, with Columbia University's Center for Decision Sciences, has been paying close attention to how well people select insurance on new marketplaces, as a consultant for some state-run programs. In his own classroom, he's been running some experiments of his own.

He, along with a professor at the University of Pennsylvania, had participants select a plan in a simulated, simplified health insurance marketplace, based solely on factors of cost. Predicted doctor's visits were fixed.

Johnson found that people actually tended to pick more costly plans, by not accurately weighing both "frontend" and "backend" costs involving premiums, the deductible and copays.

"We know that it's a difficult problem," Johnson says. "What ends up happening is a bad mistake, overweighting the deductible, under-weighing premiums."

Johnson and Schwartz are proponents of something they call "choice architecture."

So in his experiment, Johnson found a silver lining in how his "super-subjects," Columbia business students, did identify the 'best' policies.

"But you asked them how they did it, and it was kind of surprising. They used an excel spreadsheet to actually do the math," taking the premium and multiply it by 12, then taking the estimate of how often they'd go to the doctor and multiplying that times the copay, and then estimating what the out of pocket costs will be.

"When you look at the deductible and the policy, decide what's bigger, you're out of pocket costs or the amount the insurance would pay."

When Johnson then gave other participants a calculator modeled after that formula, most chose the cheaper option. While insurance decisionmaking in the real world is a lot more complicated, he adds that including better tools and insurance primers as individuals go through the application process could lead to better decisions.

Guiding those less familiar

Resources and guidance may be especially important for those who are less familiar with health insurance in general, a key contingent for which the marketplace is intended for.

Many could run the opposite risk of choosing the plan with the cheapest premium, not aware of the big out-of-pocket costs that could accompany it.

"I think the big picture is that people won't combine all the components of cost correctly, and that they will make different kinds of mistakes depending upon how the costs are framed," says Johnson.

Whatever the issue might be, that's where people like Caroline Picher could come into play.

"We get a lot of phone calls from people who've gotten through the application and gotten to see the plans section and have no idea where to go with it," says Picher, one of nine certified health care navigators in Philadelphia with Resources for Human Development. Picher, whose phone rings nonstop these days, helps people sift through plan details and break down insurance concepts. Unlike a broker, however, she cannot recommend plans.

"But I can clarify what the different costs are and how the plans work, so they can make the best decision themselves and what plan would be the best for them," she says.

The training to become a navigator or application counselor ranges from 5 to 20 hours. Picher turns to her own organization when she's stumped. The constant experience in the field, confronting different questions and situations, also serves as an important teacher.

Picher says the plans are broken down in useful ways, allowing consumers to narrow down plan choices based on a particular tier of coverage. Picher adds it's important people review which doctor networks and drug benefits each plan covers.

Better than before

For Scott Green, a 56-year-old self-employed computer specialist, the new marketplace marks a big improvement in navigating the individual insurance marketplace compared to years past.

Before, the information about different plans "was just difficult to come by, and without going through the full application process, you couldn't tell what your premium was going to be."

To view a plan with costs included required filling out extensive details about one's medical history, for example. The new marketplace, however, asked none of that and also presented him with side-by-side plan details, making it easier for Green to compare.

"They've all got to lay out their charges for primary care and specialists in the same format with the same columns," says Green. "So you don't have to go looking around to do the comparison."

Green, doesn't have any major health issues, narrowed down his plan choices from a total of 24 to 7, by deciding to go with the silver tier level of coverage. From there, he reviewed the plans over the course of two days, weighing deductibles, premiums and out of pocket costs.

And he "feels good" about his final decision. The premiums are a lot cheaper than his current plan. If he does experience a major medical event, according to his math, the total out-of-pocket costs of his new plan and the one he currently has are about the same.

Green says one added bit of security is under the Affordable Care Act, all the new plans must meet certain benefit standards. Regardless of the plan, a person's out-of-pocket annual expenses are capped at $6,350 (not including premiums).

It's that aspect that also puts Barry Schwartz, from Swarthmore, more at ease. Any decision, he says, could very well be better than what a person currently has.

"I don't think it's a disaster," says Schwartz. "As long as the worst plans are good enough plans."

Schwartz hopes that over time, two learning curves will make the online marketplaces better: Consumers will get a better feel for buying health insurance, and the marketplace designers will learn from their initial mistakes.