Swiss health insurance customers lose more money to bad decisions the longer they stay with the same provider.
April 26, 2026
Original Paper
Little Learning, Large Inertia: Deductible Choice in Swiss Health Insurance
SSRN · 6590419
The Takeaway
Economic theory assumes that people get better at making financial choices as they gain experience and age. Data from Switzerland proves that the length of time spent in a system, known as market tenure, is the primary driver of expensive mistakes. Customers do not suffer from cognitive decline, they simply stop paying attention to better options after years of being in the same default plan. This inertia keeps people in high cost plans that no longer fit their needs or health status. Longevity in a market actually makes consumers less rational and more prone to throwing money away.
From the abstract
We study deductible choices in Switzerland's mandatory health insurance market-a large-scale, transparent setting where benefits are standardized and the entire enrollee population is observed. Comparing new enrollees, who must make an active choice, with existing enrollees, who may default to their prior plan, we document large and persistent inertia: existing enrollees are 14 percentage points more likely to choose dominated deductibles and exhibit substantially higher foregone savings. Critic