Efficient Transfer of Aging Provisions in Private Health Insurance

Volker Meier

No 862, CESifo Working Paper Series from CESifo

Abstract: In long-term private health insurance contracts, aging provisions are used to flatten premium profiles. An individual would like to change insurers if she perceives a low service quality. The first-best optimum is characterized by provision transfers which are higher for high risks and may be negative for low risks. Should the actual risk status not be verifiable, provision transfers have to be uniform. Efficient transfers will equalize consumption across periods and states if high risks are deterred from switching. Otherwise, the optimum transfer balances the distortions of incentives for high-risk and low-risk individuals.

Keywords: health insurance; multi-period contracts; competition; aging provisions (search for similar items in EconPapers)
Date: 2003
New Economics Papers: this item is included in nep-edu, nep-hea and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Efficient Transfer of Aging Provisions in Private Health Insurance (2005)
Working Paper: Efficient transfer of aging provisions in private health insurance (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_862

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