An even better example is that many (most?) folks don't choose the most expensive health-plan at work when they have to pay the difference between it and a less expensive plan.

And then there are Flex spending plans. Folks put money into those plans so they can pay for health care with pre-tax money, giving them lower out of pocket costs for healthcare.

Look at how people handle their deductibles and co-pays - again, they try to minimize their costs.