Switching costs in competitive health insurance markets
In this paper we investigate the possible presence of switching costs when consumers are offered the opportunity to change their basic health insurance provider. We focus on the specific case of Switzerland which implemented a pure form of competition in basic health insurance markets. We identify several barriers to switching, namely choice overload, status quo bias, the possession of supplementary contracts for enrollees in bad health, firm’s pricing strategies based on providing low price supplementary products, poor regulation of reserves and the limitations of the previous risk-equalization mechanism which left room for risk selection practices.
|Date of creation:||Feb 2013|
|Date of revision:|
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- Brigitte Dormont & Pierre-Yves Geoffard & Karine Lamiraud, 2009.
"The influence of supplementary health insurance on switching behaviour: evidence from Swiss data,"
- Brigitte Dormont & Pierre-Yves Geoffard & Karine Lamiraud, 2009. "The influence of supplementary health insurance on switching behaviour: evidence from Swiss data," Health Economics, John Wiley & Sons, Ltd., vol. 18(11), pages 1339-1356.
- Farrell, Joseph & Klemperer, Paul, 2006.
"Coordination and Lock-In: Competition with Switching Costs and Network Effects,"
CEPR Discussion Papers
5798, C.E.P.R. Discussion Papers.
- Farrell, Joseph & Klemperer, Paul, 2007. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," Handbook of Industrial Organization, Elsevier.
- Joseph Farrell & Paul Klemperer, 2006. "Co-ordination and Lock-in: Competition with Switching Costs and Network Effects," Economics Papers 2006-W07, Economics Group, Nuffield College, University of Oxford.
- Farrell, Joseph & Klemperer, Paul, 2006. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," Competition Policy Center, Working Paper Series qt9n26k7v1, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
- Frank, Richard G. & Lamiraud, Karine, 2009.
"Choice, price competition and complexity in markets for health insurance,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 71(2), pages 550-562, August.
- Richard Frank & Karine Lamiraud, 2008. "Choice, Price Competition and Complexity in Markets for Health Insurance," NBER Working Papers 13817, National Bureau of Economic Research, Inc.
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