title: Switching insurer in the Irish voluntary health insurance market: determinants, incentives, and risk equalization.
abstract: BACKGROUND
  The determinants of consumer mobility in voluntary health insurance markets providing duplicate cover are not well understood. Consumer mobility can have important implications for competition. Consumers should be price-responsive and be willing to switch insurer in search of the best-value products. Moreover, although theory suggests low-risk consumers are more likely to switch insurer, this process should not be driven by insurers looking to attract low risks.
  
  
  METHODS
  This study utilizes data on 320,830 VHI healthcare policies due for renewal between August 2013 and June 2014. At the time of renewal, policyholders were categorized as either 'switchers' or 'stayers', and policy information was collected for the prior 12 months. Differences between these groups were assessed by means of logistic regression. The ability of Ireland's risk equalization scheme to account for the relative attractiveness of switchers was also examined.
  
  
  RESULTS
  Policyholders were price sensitive (OR 1.052, p < 0.01), however, price-sensitivity declined with age. Age (OR 0.971; p < 0.01) and hospital utilization (OR 0.977; p < 0.01) were both negatively associated with switching. In line with these findings, switchers were less costly than stayers for the 12 months prior to the switch/renew decision for single person (difference in average cost = €540.64) and multiple-person policies (difference in average cost = €450.74). Some cost differences remain for single-person policies following risk equalization (difference in average cost = €88.12).
  
  
  CONCLUSIONS
  Consumers appear price-responsive, which is important for competition provided it is based on correct incentives. Risk equalization payments largely eliminated the profitable status of switchers, although further refinements may be required.
authors.affiliation: Centre of Health Policy and Management, Trinity College Dublin (TCD), Dublin 2, Ireland. keegancp@tcd.ie.
authors.forename: Conor
authors.initials: C
authors.lastname: Keegan
authors.affiliation: Health Information and Quality Authority (HIQA), Dublin 7, Ireland.
authors.forename: Conor
authors.initials: C
authors.lastname: Teljeur
authors.affiliation: School of Economics, University College Cork (UCC), Cork, Ireland.
authors.forename: Brian
authors.initials: B
authors.lastname: Turner
authors.affiliation: Centre of Health Policy and Management, Trinity College Dublin (TCD), Dublin 2, Ireland.
authors.forename: Steve
authors.initials: S
authors.lastname: Thomas
mesh_terms: D000293:Adolescent; D000328:Adult; D000367:Age Factors; D000368:Aged; D000369:Aged, 80 and over; D005260:Female; D006801:Humans; D007343:Insurance Carriers / Q000706:statistics & numerical data*; D007348:Insurance, Health / Q000191:economics*; D007494:Ireland; D007902:Length of Stay; D008297:Male; D008875:Middle Aged; D009042:Motivation; D020379:Risk Adjustment / Q000191:economics*; D012959:Socioeconomic Factors; D055815:Young Adult
keywords: Consumer mobility; Health insurance markets; Ireland; Risk equalization