Do individuals with better health insurance system knowledge make better decisions about their health plans?

Stefan Boes and Yanmei Liu

Applied Economics, 2024, vol. 56, issue 59, 8867-8883

Abstract: Choice-based health insurance systems require individuals to be proficient in selecting a suitable health plan. However, individuals are not always well informed, possibly leading to suboptimal decisions. We use representative survey data from Switzerland to study the association between individuals’ objective knowledge about the health insurance system and one dimension of health plan choice, namely voluntary deductibles. Our results suggest that individuals with better health insurance system-related knowledge are more likely to opt for a high-deductible plan when being in good health and are more likely to opt for a low-deductible plan when having higher health care needs, which is in line with the financial incentives set by these plans. We discuss our results by exploring different sources of information gaps, potential adverse health effects, and moral hazard.

Date: 2024
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DOI: 10.1080/00036846.2023.2295303

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