TY  - JOUR
AU  - Frank,Richard
AU  - Lamiraud,Karine
TI  - Choice, Price Competition and Complexity in Markets for Health Insurance
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13817
PY  - 2008
Y2  - February 2008
UR  - http://www.nber.org/papers/w13817
L1  - http://www.nber.org/papers/w13817.pdf
N1  - Author contact info:
Richard Frank
Department of Health Care Policy
Harvard Medical School
180 Longwood Avenue
Boston, MA 02115
Tel: 617/432-0178
Fax: 617/432-1219
E-Mail: frank@hcp.med.harvard.edu

Karine Lamiraud
University of Lausanne
Faculty of Business and Economics
Institute of Health Economics and Management
E-Mail: lamiraud@essec.edu
AB  - 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.
ER  -