Studies from Erasmus University Have Provided New Data on Health Insurance (Supplementary insurance as a switching cost for basic health insurance:…

Managed Care Weekly Digest

Studies from Erasmus University Have Provided New Data on Health Insurance (Supplementary insurance as a switching cost for basic health insurance: Empirical results from the Netherlands)

By a News Reporter-Staff News Editor at Managed Care Weekly Digest -- Current study results on Health Insurance have been published. According to news reporting originating from Rotterdam, Netherlands, by NewsRx correspondents, research stated, "Nearly everyone with a supplementary insurance (SI) in the Netherlands takes out the voluntary SI and the mandatory basic insurance (BI) from the same health insurer. Previous studies show that many high risks perceive SI as a switching cost for BI."

Our news editors obtained a quote from the research from Erasmus University, "Because consumers' current insurer provides them with a guaranteed renewability, SI is a switching cost if insurers apply selective underwriting to new applicants. Several changes in the Dutch health insurance market increased insurers' incentives to counteract adverse selection for SI. Tools to do so are not only selective underwriting, but also risk rating and product differentiation. If all insurers use the latter tools without selective underwriting, SI is not a switching cost for BI. We investigated to what extent insurers used these tools in the periods 2006-2009 and 2014-2015. Only a few insurers applied selective underwriting: in 2015, 86% of insurers used open enrolment for all their SI products, and the other 14% did use open enrolment for their most common SI products. As measured by our indicators, the proportion of insurers applying risk rating or product differentiation did not increase in the periods considered. Due to the fear of reputation loss insurers may have used 'less visible' tools to counteract adverse selection that are indirect forms of risk rating and product differentiation and do not result in switching costs. So, although many high-risks perceive SI as a switching cost, most insurers apply open enrolment for SI."

According to the news editors, the research concluded: "By providing information to high-risks about their switching opportunities, the government could increase consumer choice and thereby insurers' incentives to invest in high-quality care for high-risks."

For more information on this research see: Supplementary insurance as a switching cost for basic health insurance: Empirical results from the Netherlands. Health Policy, 2017;121(10):1085-1092. Health Policy can be contacted at: Elsevier Ireland Ltd, Elsevier House, Brookvale Plaza, East Park Shannon, Co, Clare, 00000, Ireland. (Elsevier - www.elsevier.com; Health Policy - www.journals.elsevier.com/health-policy/)

The news editors report that additional information may be obtained by contacting D. Willemse-Duijmelinck, Erasmus University, Inst Hlth Policy & Management, NL-3000 DR Rotterdam, Netherlands. Additional authors for this research include W. van de Ven and I. Mosca (see also Health Insurance).

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.healthpol.2017.08.003. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

Keywords for this news article include: Rotterdam, Netherlands, Europe, Health Insurance, Erasmus University.