Monday, May 23, 2011
Posted by D. Daniel Sokol
Alexander Kemnitz, Dresden University of Technology - Faculty of Economics and Business Management suggests A Simple Model of Health Insurance Competition.
ABSTRACT: This paper investigates competition between health insurance companies under different financing regulations. We consider two alternatives advanced in recent German health care reform discussions: competition by contribution rates (health contributions) and by fees (health premia). We find that contribution rate competition yields lower company profits and higher consumer welfare than premia competition when switching between insurance companies is costly.