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

Author

Listed:
  • Juan Pablo Atal
  • Hanming Fang
  • Martin Karlsson
  • Nicolas R. Ziebarth

Abstract

We study theoretically and empirically how consumers in an individual private long‐term health insurance market with front‐loaded contracts respond to a newly mandated portability requirement 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.

Suggested Citation

  • Juan Pablo Atal & Hanming Fang & Martin Karlsson & Nicolas R. Ziebarth, 2019. "Exit, Voice, or Loyalty? An Investigation Into Mandated Portability of Front‐Loaded Private Health Plans," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 86(3), pages 697-727, September.
    • Handle: RePEc:bla:jrinsu:v:86:y:2019:i:3:p:697-727
    DOI: 10.1111/jori.12233
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    Cited by:

    1. Werbeck, Anna & Wübker, Ansgar & Ziebarth, Nicolas R., 2021. "Cream skimming by health care providers and inequality in health care access: Evidence from a randomized field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 1325-1350.
    2. Karlsson, Martin & Wang, Yulong & Ziebarth, Nicolas R., 2024. "Getting the right tail right: Modeling tails of health expenditure distributions," Journal of Health Economics, Elsevier, vol. 97(C).
    3. Avdic, Daniel & Decker, Simon & Karlsson, Martin & Salm, Martin, 2024. "No-claim refunds and healthcare use," Journal of Public Economics, Elsevier, vol. 230(C).
    4. Cao, Yaming & Fischer-Weckemann, Björn & Geyer, Johannes & Ziebarth, Nicolas R., 2026. "Fundamentally reforming the DI system: Evidence from Germany," ZEW Discussion Papers 26-006, ZEW - Leibniz Centre for European Economic Research.
    5. Juan Pablo Atal & Hanming Fang & Martin Karlsson & Nicolas R. Ziebarth, 2020. "Long-Term Health Insurance: Theory Meets Evidence," PIER Working Paper Archive 20-009, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    6. Kylie A. Braegelmann & Jörg Schiller, 2025. "Lowering acquisition costs with a commission cap? Evidence from the German private health insurance market," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 50(2), pages 168-204, September.
    7. Juan Pablo Atal, 2019. "Lock-in in Dynamic Health Insurance Contracts: Evidence from Chile," PIER Working Paper Archive 19-020, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    8. Juan Pablo Atal & Hanming Fang & Martin Karlsson & Nicolas R. Ziebarth, 2025. "German Long-Term Health Insurance: Theory Meets Evidence," Journal of Political Economy, University of Chicago Press, vol. 133(6), pages 1840-1885.

    More about this item

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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