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Switching benefits and costs in the Irish health insurance market: an analysis of consumer surveys

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  • Keegan, Conor
  • Teljeur, Conor
  • Turner, Brian
  • Thomas, Steve

Abstract

Abstract Relatively little analysis has taken place internationally on the consumer-reported benefits and costs to switching insurer in multi-payer health insurance markets. Ideally, consumers should be willing to switch out of consideration for price and quality and switching should be able to take place without incurring significant switching costs. Costs to switching come in many forms and understanding the nature of these costs is necessary if policy interventions to improve market competition are to be successful. This study utilises data from consumer surveys of the Irish health insurance market collected between 2009 and 2013 (N $$=$$ = 1703) to examine consumer-reported benefits and costs to switching insurer. Probit regression models are specified to examine the relationship between consumer characteristics and reported switching costs, and switching behaviour, respectively. Overall evidence suggests that switchers in the Irish market mainly did so out of consideration for price. Transaction cost was the most common switching cost identified, reported by just under 1 in 7 non-switchers. Psychological switching costs may also be impacting behaviour. Moreover, high-risk individuals were more likely to experience switching costs and this was reflected in actual switching behaviour. A recent information campaign launched by the market regulator may prove beneficial in reducing perceived transaction costs in the market, however, a more focused campaign aimed at high-risk consumers may be necessary to reduce inequalities. Policy-makers should also consider the impact insurer behaviour may have on decision-making.
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Suggested Citation

  • Keegan, Conor & Teljeur, Conor & Turner, Brian & Thomas, Steve, 2018. "Switching benefits and costs in the Irish health insurance market: an analysis of consumer surveys," Papers RB201820, Economic and Social Research Institute (ESRI).
  • Handle: RePEc:esr:wpaper:rb201820
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    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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