Insurance Search And Switching Behavior

Date Added: Jul 2010
Format: PDF

This paper looks into the search behavior of consumers in the market for health insurance contracts. The authors consider the recent health insurance reform in The Netherlands, where a private-public mix of insurance provision was replaced by a system based on managed competition. Although all insurers offer the same basic package (determined by the government), there is substantial premium dispersion. They develop a simple consumer search model containing the main features of the Dutch health insurance system.