The effect of price on switching among health plans.

Full Abstract

A recent policy change by the University of California (UC) provides a unique natural experiment for investigating the sensitivity of consumers to health plan premiums. When the UC moved to a policy of limiting its contribution to the cost of the least expensive plan, out-of-pocket premiums increased for roughly one-third of UC employees. We examine the extent to which UC employees switched plans in response to this change in premiums. Our results indicate a strong response. Individuals facing premium increases of less than $10 were roughly 5 times as likely to switch plans as those whose premiums remained constant.

Author information

Author/s: Buchmueller, T C (TC); Feldstein, P J (PJ);

Affiliation: Graduate School of Management, University of California, Irvine 92717, USA. tcbuchmu(-atsign-)uci.edu

Journal and publication information

Publication Type: Journal Article

Journal: Journal of health economics (J Health Econ), published in NETHERLANDS. (Language: eng)

Reference: 1997-Apr; vol 16 (issue 2) : pp 231-47

Dates: Created 1997/09/05; Completed 1997/09/05; Revised 2000/12/18;

PMID: 10169096, status: MEDLINE (last retrieval date: 2/18/2009, IMS Date: )

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