Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/87074
Authors: 
Bolhaar, Jonneke
van der Klaauw, Bas
Lindeboom, Maarten
Year of Publication: 
2010
Series/Report no.: 
Tinbergen Institute Discussion Paper 10-072/3
Abstract: 
This paper looks into the search behavior of consumers in the market for health insurance contracts. We 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. We develop a simple consumer search model containing the main features of the Dutch health insurance system. This model provides us with a number of hypotheses, which we test using data from the Dutch Health Care Consumer Panel. The data confirm the standard predictions on consumer choice (i.e. there is adverse selection and a lower premium increases coverage). We also find that consumers with lower search costs are more likely to receive a group contract offer. This generates a situation of price discrimination where individuals without group contracts and higher s! earch costs pay higher premiums and buy lower insurance coverage.
Subjects: 
health insurance
consumer search behavior
Dutch health insurance reform
JEL: 
I11
D83
Document Type: 
Working Paper

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