Journal articles
Year
2009
Abstract
This paper focuses on the switching behaviour of enrolees in the Swiss basic health insurance system. Even though
the new Federal Law on Social Health Insurance (LAMal) was implemented in 1996 to promote competition
among health insurers in basic insurance, there is limited evidence of premium convergence within cantons. This
indicates that competition has not been effective so far, and reveals some inertia among consumers who seem
reluctant to switch to less expensive funds. We investigate one possible barrier to switching behaviour, namely the
influence of supplementary insurance. We use survey data on health plan choice (a sample of 1943 individuals
whose switching behaviours were observed between 1997 and 2000) as well as administrative data relative to all
insurance companies that operated in the 26 Swiss cantons between 1996 and 2005. The decision to switch and the
decision to subscribe to a supplementary contract are jointly estimated.
Our findings show that holding a supplementary insurance contract substantially decreases the propensity to
switch. However, there is no negative impact of supplementary insurance on switching when the individual assesses
his/her health as ¿very good¿. Our results give empirical support to one possible mechanism through which
supplementary insurance might influence switching decisions: given that subscribing to basic and supplementary
contracts with two different insurers may induce some administrative costs for the subscriber, holding
supplementary insurance acts as a barrier to switch if customers who consider themselves ¿bad risks¿ also believe
that insurers reject applications for supplementary insurance on these grounds. In comparison with previous
research, our main contribution is to offer a possible explanation for consumer inertia. Our analysis illustrates how
consumer choice for one¿s basic health plan interacts with the decision to subscribe to supplementary insurance.
DORMONT, B., GEOFFARD, P.Y. et LAMIRAUD, K. (2009). The influence of supplementary health insurance on switching behaviour: evidence from Swiss data. Health Economics, 18(11), pp. 1339-1356.