Sweet spot for Obamacare exchanges: some competition, but not too much?

This exchange in a Modern Healthcare interview of Douglas Hough, author of Irrationality in Health Care: What Behavioral Economics Reveals About What We Do and Why, may have some implications for the design of the ACA insurance exchanges:

[Jason] Shafrin: People often perform better, in terms of choosing better when they have fewer choices. Why is that the case? Most economists think that more choice is better.

Hough: What behavioral psychologists and behavioral economists have discovered is that more choice is not necessarily better. The problem is regret bias. If they are shown five things and are asked to choose among them, they can probably choose well. But if they are offered 25 or 50, people end up not choosing at all. This is actually what happened at the beginning of Medicare Part D, when patients were given an extraordinary number of prescription drug plans choices, and a good number of the elderly were paralyzed by having to make that choice. My mother was an incredibly successful business woman, but when at the age of 85 she was faced with the choice of among 45 plans in Virginia for Part D, she just threw up her hands and said, “Well, I don't know which one to pick. Doug, you pick one for me.”