Choice, Price Competition and Complexity in Markets for Health Insurance / Richard Frank, Karine Lamiraud.

Format:

Book

Author/Creator:

Frank, Richard.

Contributor:

National Bureau of Economic Research.

Lamiraud, Karine.

Series:

Working Paper Series (National Bureau of Economic Research) no. w13817.

NBER working paper series no. w13817

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2008.

Summary:

The United States and other nations rely on consumer choice and price competition among competing health plans to allocate resources in the health sector. A great deal of research has examined the efficiency consequences of adverse selection in health insurance markets, less attention has been devoted to other aspects of consumer choice. The nation of Switzerland offers a unique opportunity to study price competition in health insurance markets. Switzerland regulates health insurance markets with the aim of minimizing adverse selection and encouraging strong price competition. We examine consumer responses to price differences in local markets and the degree of price variation in local markets. Using both survey data and observations on local markets we obtain evidence suggesting that as the number of choices offered to individuals grow their willingness to switch plans given a set of price dispersion differences declines allowing large price differences for relatively homogeneous products to persist. We consider explanations for this phenomenon from economics and psychology.

Notes:

Print version record

February 2008.