Policy Choice and Product Bundling in a Complicated Health Insurance Market: Do People get it Right?

Nathan Kettlewell

No 2016-16, Discussion Papers from School of Economics, The University of New South Wales

Abstract: This paper evaluates health insurance policy selection and how this interacts with product bundling by using a discrete choice experiment closely calibrated to the Australian private health insurance market. The experimental approach overcomes some limitations of revealed preference research in this area. The results indicate that consumers are likely to make choices that violate expected utility theory, use heuristic decision strategies, and over-insure relative to minimising out-of-pocket costs. Decision quality is significantly lower when choosing a bundled hospital/ancillaries health insurance policy (compared to stand-alone ancillaries cover), which is the policy type most consumers purchase in Australia.

Keywords: health insurance; heuristics; choice consistency; discrete choice experiment; latent class logit (search for similar items in EconPapers)
JEL-codes: D03 D81 I13 (search for similar items in EconPapers)
Pages: 59 pages
Date: 2016-10
New Economics Papers: this item is included in nep-dcm, nep-hea, nep-ias and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://research.economics.unsw.edu.au/RePEc/papers/2016-16.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Unavailable: Back-end server is at capacity

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:swe:wpaper:2016-16

Access Statistics for this paper

More papers in Discussion Papers from School of Economics, The University of New South Wales Contact information at EDIRC.
Bibliographic data for series maintained by Hongyi Li ().