Switching benefits and costs in the Irish health insurance market: an analysis of consumer surveys

An insight into the competitive nature of health insurance markets can be gained from understanding what influences a consumer’s decision to switch from one health insurer to another. A health insurance consumer’s decision to switch insurer will be influenced by the relative benefits and costs to switching. Benefits to switching mainly relate to cost-savings and better quality of insurance plans. Costs to switching come in many forms and can include the time and effort involved in switching insurer (transaction costs) and the time spent identifying and interpreting alternative insurer plans (search costs). Health insurance consumers may also be subject to behavioural biases such as loyalty to their insurer or a preference for the status-quo (known as ‘psychological costs’) which may impede switching. High switching costs can weaken market competitiveness and inequalities can arise if certain groups of consumers are more likely to experience these costs. This analysis examines consumer-reported benefits and costs to switching health insurer in the Irish private health insurance market.