Exit, Voice or Loyalty? An Investigation into Mandated Portability of Front-Loaded Private Health Plans

Juan Pablo Atal (), Hanming Fang, Martin Karlsson and Nicolas Ziebarth ()
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Juan Pablo Atal: University of Pennsylvania

No 10871, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We study theoretically and empirically how consumers in an individual private longterm health insurance market with front-loaded contracts respond to newly mandated portability requirements of their old-age provisions. To foster competition, effective 2009, the German legislature made the portability of standardized old-age provisions mandatory. Our theoretical model predicts that the portability reform will increase internal plan switching. However, under plausible assumptions, it will not increase external insurer switching. Moreover, the portability reform will enable unhealthier enrollees to reoptimize their plans. We find confirmatory evidence for the theoretical predictions using claims panel data from a big private insurer.

Keywords: consumer bargaining; health policy reform; individual private health insurance; old-age provisions; portability; health plan switching; switching costs; retention (search for similar items in EconPapers)
JEL-codes: G22 I11 I18 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2017-06
New Economics Papers: this item is included in nep-age, nep-cta, nep-hea and nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: Journal of Risk and Insurance , 2019, 86 (3), 697-727

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Related works:
Journal Article: Exit, Voice, or Loyalty? An Investigation Into Mandated Portability of Front‐Loaded Private Health Plans (2019)
Working Paper: Exit, Voice or Loyalty? An Investigation into Mandated Portability of Front-Loaded Private Health Plans (2017)
Working Paper: Exit, Voice or Loyalty? An Investigation into Mandated Portability of Front-Loaded Private Health Plans (2017)
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