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| Research article summary (published 30 Dec 2001): |
Switching costs, price sensitivity and health plan choice.
Full Abstract
We investigate the extent to which sensitivity to health plan premiums differs across individuals according to characteristics related to the cost of switching plans. Our results indicate substantial variation in price sensitivity related to expected health care costs:
younger, healthier employees are between two and four times more sensitive to price than employees who are older and who have been recently hospitalized or diagnosed with cancer. We also find evidence of status quo bias:
estimated premium elasticities are significantly higher for new hires than for incumbent employees. Simulations combining our results with actuarial data illustrate the cost implications of risk-related differences in price elasticity.
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Author information
Author/s: Strombom, Bruce A (BA); Buchmueller, Thomas C (TC); Feldstein, Paul J (PJ);
Affiliation: Analysis Group/Economics Inc, Los Angelus, CA 90017, USA.
Journal and publication information
Publication Type: Journal Article; Research Support, Non-U.S. Gov't
Journal: Journal of health economics (J Health Econ), published in Netherlands. (Language: eng)
Reference: 2002-Jan; vol 21 (issue 1) : pp 89-116
Dates: Created 2002/02/15; Completed 2002/02/22; Revised 2006/11/15;
PMID: 11845927, status: MEDLINE (last retrieval date: 11/6/2008)
Sourced from the National Library of Medicine. Abstract text and other information may be subject to copyright.
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