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A Simple Model of Health Insurance Competition

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  • Alexander Kemnitz

Abstract

This paper investigates competition between health insurance companies under different financing regulations. We consider two alternatives advanced in recent German health care reform discussions: competition by contribution rates (health contributions) and by fees (health premia). We find that contribution rate competition yields lower company profits and higher consumer welfare than premia competition when switching between insurance companies is costly.

Suggested Citation

  • Alexander Kemnitz, 2010. "A Simple Model of Health Insurance Competition," CESifo Working Paper Series 3220, CESifo.
    • Handle: RePEc:ces:ceswps:_3220
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    References listed on IDEAS

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    More about this item

    Keywords

    health care reform; competition; consumer choice;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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