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

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  • Wuppermann, Amelie
  • Bauhoff, Sebastian
  • Grabka, Markus

Abstract

We investigate two determinants of the price sensitivity of health plan demand among retirees in the German social health insurance (SHI): the size of the choice set and the salience of premium differences. We use variation in the choice set over time and between regions, and an increase in the salience of premium differences introduced by a recent reform that changed how premiums are framed. Using information on health plan switches in the German Socio Economic Panel, augmented with information on individuals choice sets we find that retirees are less likely to react to potential savings from switching when they have more plans to choose from and when differences between premiums are less salient. The results imply that simplifying choices could save retirees money and also improve the functioning of the health insurance market.

Suggested Citation

  • Wuppermann, Amelie & Bauhoff, Sebastian & Grabka, Markus, 2014. "The Price Sensitivity of Health Plan Choice among Retirees: Evidence from the German Social Health Insurance," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100352, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc14:100352
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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. 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.
    4. 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.
    5. 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.
    6. 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.
    7. 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.
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    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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