How Do Health, Care Services Consumption and Lifestyle Factors Affect the Choice of Health Insurance Plans in Switzerland?

Abstract

In compulsory health insurance in Switzerland, policyholders can choose two main features, the level of deductible and the type of plan. Deductibles can be chosen among six levels, which range from CHF 300 to 2500. While the coverage and benefits are identical, insurers offer several plans where policyholders must first call a medical hotline, consult their family doctor, or visit a doctor from a defined network. The main benefit of higher deductibles and insurance plans with limitations is lower premiums. The insureds’ decisions to opt for a specific cover depend on observed and unobserved characteristics. The aim of this research is to understand the correlation between insurance plan choices and lifestyle through the state of health and medical care consumption in the setting of Swiss mandatory health insurance. To do so, we account for individual health and medical health care consumption as unobserved variables employing structural equation modeling. Our empirical analysis is based on data from the Swiss Health Survey wherein lifestyle factors like the body mass index, diet, physical activity, and commuting mode are available. From the 9301 recorded observations, we find a positive relationship between having a “healthy” lifestyle, a low consumption of doctors’ services, and choosing a high deductible, as well as an insurance plan with restrictions. Conversely, higher health care services’ usage triggers the choice of lower deductibles and standard insurance plans.