Health insurance and switching behavior: Evidence from the Netherlands

Introduction: Since the introduction of the Health Insurance Act in the Netherlands in 2006, insurers are incentivized to compete on prices for basic health insurance, and on price and quality for supplementary insurance. The new health insurance system aimed to create a more competitive market in which consumers would switch health plans, thereby stimulating insurers to price competition and quality improvement. This article evaluates the switching behavior of Dutch consumers and evaluates whether this behavior is advantageous to the goals of the reform. Methods: Three surveys were conducted: from 2005-2006 (n = 478), 2008-2009 (n = 389), and 2010-2011 (n = 191). Results: In 2005-2006, almost 20 percent of the Dutch consumers switched their insurance company. In between 2006 and 2012, however, the percentage of switchers decreased to less than four percent. The main cause of this decrease is that consumers no longer perceive sufficient differences between insurance companies in terms of premium and service. In addition, consumers have difficulties finding the proper information making the right decision and believe they may not be accepted for the supplementary insurance. Consequently, insurance companies only perceive limited incentives to create a more competitive market. Conclusion: Clear and unambiguous information, combined with an obligatory acceptance for the supplementary insurance might help to improve the potential mobility of Dutch consumers.