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Abstract

This paper provides field evidence on (a) how price framing affects consumers’ decision to switch health insurance plans and (b) how the price elasticity of demand for health insurance can be influenced by policymakers through simple regulatory efforts. In 2009, in order to foster competition among health insurance companies, German federal regulation required health insurance companies to express price differences between health plans in absolute Euro values rather than percentage point payroll tax differences. Using individuallevel panel data, as well as aggregated health plan-level panel data, we find that the reform led to a sixfold increase in an individual’s switching probability and a threefold demand elasticity increase.

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Bibliographic Info

Paper provided by HEDG, c/o Department of Economics, University of York in its series Health, Econometrics and Data Group (HEDG) Working Papers with number 12/03.

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Date of creation: Feb 2012
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Handle: RePEc:yor:hectdg:12/03

Contact details of provider:
Postal: HEDG/HERC, Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom
Phone: (0)1904 323776
Fax: (0)1904 323759
Email:
Web page: http://www.york.ac.uk/res/herc/research/hedg/
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Related research

Keywords: health insurance; health plan switching; price competition; price elasticity; SOEP;

Other versions of this item:

Find related papers by JEL classification:

• H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
• I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
• I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

This paper has been announced in the following NEP Reports:

• NEP-ALL-2012-02-27 (All new papers)
• NEP-IAS-2012-02-27 (Insurance Economics)

References

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