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International Portability of Health-Cost Cover: Mobility, Insurance, and Redistribution

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  • Martin Werding
  • Stuart McLennan

Abstract

Public health insurance and other arrangements covering health-costs effectively provide insurance against changes in health status. These arrangements engage in burden-smoothing over the life cycle and entail various elements of redistribution. Lack of portability regarding this type of cover may impede international mobility and create financial losses or windfall gains on various sides, which can lead to risk segmentation across national health systems. Existing portability rules do not fully address these problems. In this paper, we try to clarify the implications of mobility for typical systems covering health costs and the requirements which have to be met to ensure full portability. When individuals are internationally mobile, compensating payments are needed based on changes in expected net costs in both of the health funds involved. Illustrative simulations show that this approach may be operative under real-world conditions.

Suggested Citation

  • Martin Werding & Stuart McLennan, 2012. "International Portability of Health-Cost Cover: Mobility, Insurance, and Redistribution," CESifo Working Paper Series 3952, CESifo.
    • Handle: RePEc:ces:ceswps:_3952
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    References listed on IDEAS

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    1. Werding, Martin & McLennan, Stuart, 2011. "International portability of health-cost coverage : concepts and experience," Social Protection Discussion Papers and Notes 63929, The World Bank.
    2. Jonathan Gruber & Brigitte C. Madrian, 2002. "Health Insurance, Labor Supply, and Job Mobility: A Critical Review of the Literature," JCPR Working Papers 255, Northwestern University/University of Chicago Joint Center for Poverty Research.
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    12. Wido Geis & Silke Uebelmesser & Martin Werding, 2013. "How do Migrants Choose Their Destination Country? An Analysis of Institutional Determinants," Review of International Economics, Wiley Blackwell, vol. 21(5), pages 825-840, November.
    13. Robert Fenge & Silke Uebelmesser & Martin Werding, 2006. "On the Optimal Timing of Implicit Social Security Taxes Over the Life Cycle," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 62(1), pages 68-107, March.
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    Cited by:

    1. Robert Holzmann, 2016. "Taxing Pensions of an Internationally Mobile Labor Force: Portability Issues and Taxation Options," CESifo Working Paper Series 5715, CESifo.
    2. Robert Holzmann, 2016. "Do bilateral social security agreements deliver on the portability of pensions and health care benefits? A summary policy paper on four migration corridors between EU and non-EU member states," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-35, December.
    3. Werding, Martin & Läpple, Benjamin, 2022. "Finanzrisiken für den Bund durch die demographische Entwicklung in der Sozialversicherung: Reformszenarien," FiFo Reports - FiFo-Berichte 31, University of Cologne, FiFo Institute for Public Economics.
    4. Taha, N. & Messkoub, M. & Siegmann, K.A., 2013. "How portable is social security for migrant workers?," ISS Working Papers - General Series 50162, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    5. Robert Holzmann, 2018. "The portability of social benefits across borders," IZA World of Labor, Institute of Labor Economics (IZA), pages 452-452, October.

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    More about this item

    Keywords

    social insurance; health costs; migration; international portability; fiscal externalities; risk segmentation;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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