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Risk-specific transferable ageing provisions in private health insurance

Author

Listed:
  • Volker Meier
  • Martin Werding

Abstract

Switching insurers within the German private health insurance system is currently associated with forfeiting claims on the accumulated ageing provision, which hampers competition in this sector. The German health insurance reform 2007 introduces transferability of the ageing provision within a new basic contract. The task is to develop a functional transfer scheme that increases the switching options and at the same time does not harm the individuals staying with the original insurer. The health insurance reform 2007 fails to protect those individuals who remain with the original insurer against premium increases if healthy individuals leave the pool. By combining trasfer rules for contract and insurer changes, transfer volumes will be too high. The proposal of risk-specific transfers entails that every individual who changes his insurer is entitled to the annuity share of the ageing provision, depending on current age and age of entry into the original contract. Individuals willing to change insurers whose health prospects have deteriorated substantially through the original contract period will get a supplementary transfer, being determined by a neutral risk-assessment agency.

Suggested Citation

  • Volker Meier & Martin Werding, 2007. "Risk-specific transferable ageing provisions in private health insurance," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 38.
    • Handle: RePEc:ces:ifofob:38
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    File URL: https://www.ifo.de/DocDL/ifo_Forschungsberichte_38.pdf
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    References listed on IDEAS

    as
    1. Volker Meier, 2005. "Efficient Transfer of Aging Provisions in Private Health Insurance," Journal of Economics, Springer, vol. 84(3), pages 249-275, May.
    2. Florian Baumann & Volker Meier & Martin Werding, 2008. "Transferable Ageing Provisions in Individual Health Insurance Contracts," German Economic Review, Verein für Socialpolitik, vol. 9(3), pages 287-311, August.
    3. Pauly, Mark V & Kunreuther, Howard & Hirth, Richard, 1995. "Guaranteed Renewability in Insurance," Journal of Risk and Uncertainty, Springer, vol. 10(2), pages 143-156, March.
    4. Volker Meier, 2006. "Not every reform is a good reform: Procedures for the transfer of accrued reserves in private health-care insurance," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 59(16), pages 21-24, August.
    5. Herring, Bradley & Pauly, Mark V., 2006. "Incentive-compatible guaranteed renewable health insurance premiums," Journal of Health Economics, Elsevier, vol. 25(3), pages 395-417, May.
    6. Volker Meier & Florian Baumann & Martin Werding, 2004. "Modelle zur Übertragung individueller Altersrückstellungen beim Wechsel privater Krankenversicherer," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 14.
    7. Frick, Kevin D, 1998. "Consumer Capital Market Constraints and Guaranteed Renewable Insurance," Journal of Risk and Uncertainty, Springer, vol. 16(3), pages 271-278, July-Aug..
    8. Cochrane, John H, 1995. "Time-Consistent Health Insurance," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 445-473, June.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Cirsten Roppel & Ulrich Roppel, 2012. "Labour Market and Social Policy: Not Calling Achievements into Question," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 65(04), pages 22-30, February.
    2. Martin Nell & Stephan Rosenbrock, 2008. "Wettbewerb in kapitalgedeckten Krankenversicherungssystemen: Ein risikogerechter Ansatz zur Übertragung von Alterungsrückstellungen in der Privaten Krankenversicherung," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 9(2), pages 173-195, May.
    3. Wasem, Jürgen & Buchner, Florian & Walendzik, Anke & Schröder, Michael, 2016. "Qualitative Analysen zur harmonisierten Berechnung einer Alterungsrückstellung und der verfassungskonformen Ausgestaltung ihrer Portabilität: Endbericht - Studie im Auftrag des Verbraucherzentrale Bun," IBES Diskussionsbeiträge 218, University of Duisburg-Essen, Institute of Business and Economic Studie (IBES).

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    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General

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