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The Price Sensitivity of Health Plan Choice: Evidence from Retirees in the German Social Health Insurance

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  • Wuppermann, Amelie C.
  • Bauhoff, Sebastian
  • Grabka, Markus M.

Abstract

We investigate two determinants of the price sensitivity of health plan demand: the size of the choice set and the salience of premium differences. Using variation in both features in the German Social Health Insurance (SHI) and information on health plan switches of retirees in the German Socio Economic Panel, augmented with information on individuals’ choice sets we find that retirees react less to potential savings from switching when they have more plans to choose from and when differences between premiums are less salient. Simplifying choices could save consumers money and improve the functioning of the health insurance market.

Suggested Citation

  • Wuppermann, Amelie C. & Bauhoff, Sebastian & Grabka, Markus M., 2014. "The Price Sensitivity of Health Plan Choice: Evidence from Retirees in the German Social Health Insurance," Discussion Papers in Economics 21080, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenec:21080
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    File URL: https://epub.ub.uni-muenchen.de/21080/1/Wuppermann_etal_Juli2014.pdf
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    Cited by:

    1. Bauhoff, Sebastian & Fischer, Lisa & Göpffarth, Dirk & Wuppermann, Amelie C., 2017. "Plan responses to diagnosis-based payment: Evidence from Germany’s morbidity-based risk adjustment," Journal of Health Economics, Elsevier, vol. 56(C), pages 397-413.
    2. Pilny, Adam & Wübker, Ansgar & Ziebarth, Nicolas R., 2017. "Introducing risk adjustment and free health plan choice in employer-based health insurance: Evidence from Germany," Journal of Health Economics, Elsevier, vol. 56(C), pages 330-351.
    3. Tamara Bischof & Christian P.R. Schmid, 2018. "Consumer price sensitivity and health plan choice in a regulated competition setting," Health Economics, John Wiley & Sons, Ltd., vol. 27(9), pages 1366-1379, September.
    4. Christian Bünnings & Hendrik Schmitz & Harald Tauchmann & Nicolas R. Ziebarth, 2015. "How Health Plan Enrollees Value Prices Relative to Supplemental Benefits and Service Quality," Ruhr Economic Papers 0545, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    5. Bunnings, C,; & Schmitz, H,; & Tauchmann, H,; & Ziebarth, N.R,;, 2015. "How Health Plan Enrollees Value Prices Relative to Supplemental Benefits and Service Quality," Health, Econometrics and Data Group (HEDG) Working Papers 15/02, HEDG, c/o Department of Economics, University of York.
    6. Werbeck, Anna, 2024. "Stated preferences and actual choices in german health insurance," Ruhr Economic Papers 1091, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    7. Kelaher, Margaret & Prang, Khic-Houy & Sabanovic, Hana & Dunt, David, 2019. "The impact of public performance reporting on health plan selection and switching: A systematic review and meta-analysis," Health Policy, Elsevier, vol. 123(1), pages 62-70.
    8. Dalit Daily-Amir & Hansjörg Albrecher & Martin Bladt & Joël Wagner, 2019. "On Market Share Drivers in the Swiss Mandatory Health Insurance Sector," Risks, MDPI, vol. 7(4), pages 1-25, November.
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    10. Sai Krishnan S. & Subramanian S. Iyer & Sai Balaji SMR, 2022. "Insights from behavioral economics for policymakers of choice‐based health insurance markets: A scoping review," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 25(2), pages 115-143, June.

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    More about this item

    Keywords

    health plan choice; choice architecture; German social health insurance;
    All these keywords.

    JEL classification:

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

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