Switching benefits and costs in competitive health insurance markets: A conceptual framework and empirical evidence from the Netherlands

Switching insurer in the Irish voluntary health insurance market: determinants, incentives, and risk equalization

“…The individual decision to switch insurer can be partly understood by weighing up the costs and benefits of switching [1][2][3][4]. Particularly, price and quality considerations should influence choice of health insurer.…”

“…Although consumer choice is an important predicate of a functioning competitive market, search costs tend to be higher the more product differentiation there is [2]. Switching costs relate to the one-time costs (for example, transaction costs, learning costs, exit costs, see [3]) involved in switching insurer. Switching costs may be subject to behavioral biases that do not reflect rational choice.…”

“…Duijmelinck et al [3] note that too much switching can result in high administrative costs, while low switching rates have been observed in competitive and non-competitive markets. In this context, no ideal rate of switching exists.…”

“…Currently there are three other insurers competing in the market in conjunction with the incumbent VHI 3. A contract is specified as providing for non-advanced cover if not more than 66 % of the full cost for hospital charges in a private hospital or prescribed minimum benefits, if lower, is always provided.…”

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

“…Particularly, individuals should be willing to switch out of price and quality concerns to motivate insurers to compete along these parameters. However, costs to switching also exist and these will also influence decision making [15]. High switching costs can weaken competitive forces and inequalities can arise if certain groups are more likely to experience these costs.…”