Who is Changing Health Insurance Coverage? Empirical Evidence on Policyholder Dynamics

Christiansen, Marcus C.; Eling, Martin; Schmidt, Jan-Philipp; Zirkelbach, Lorenz

doi:10.1111/jori.12053

Cited by 17 publications

(20 citation statements)

References 36 publications

(61 reference statements)

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“…Hofmann and Browne (2013) describe GLTHI contracts and show that switching behavior in the market is consistent with its incentive structure. Christiansen et al (2016) empirically study determinants of lapsing and switching behavior. Baumann et al (2008) and Eekhoff et al (2006) discuss the potential effects of higher switching rates on market competition if the capital accumulated through frontloaded payments were to be made portable across insurers.…”

Section: Introductionmentioning

confidence: 99%

Long-Term Health Insurance: Theory Meets Evidence

et al. 2020

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To insure policyholders against contemporaneous health expenditure shocks and future reclassification risk, long-term health insurance constitutes an alternative to community-rated shortterm contracts with an individual mandate. Relying on unique claims panel data from a large private insurer in Germany, we study a real-world long-term health insurance application with a life-cycle perspective. We show that German long-term health insurance (GLTHI) achieves substantial welfare gains compared to a series of risk-rated short-term contracts. Although, by its simple design, the premium setting of GLTHI contract departs significantly from the optimal dynamic contract, surprisingly we only find modest welfare differences between the two. Finally, we conduct counterfactual policy experiments to illustrate the welfare consequences of integrating GLTHI into a system with a "Medicare-like" public insurance that covers people above 65.

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Section: Introductionmentioning

confidence: 99%

Long-Term Health Insurance: Theory Meets Evidence

et al. 2020

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“…Hofmann and Browne (2013) do not cover the 2009 reform but discuss the reform as promising field for future research. Exploiting 2010 claims data of another German private insurer, Christiansen et al (2016) empirically study determinants of lapsing and switching and 3 The paper also contributes to the literature studying health plan switching and switching costs (Buchmueller and Feldstein, 1997;Cutler and Reber, 1998;Strombom et al, 2002;Schut et al, 2003;Nuscheler and Knaus, 2005;Abraham et al, 2006;Dijk et al, 2008;Dafny and Dranove, 2008;Bouckaert et al, 2010;Schram and Sonnemans, 2011;Biglaiser et al, 2013;Grunow and Nuscheler, 2014;Boonen et al, 2015;Bünnings et al, 2017;Schmitz and Ziebarth, 2017).…”

Section: Introductionmentioning

confidence: 99%

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

Atal¹,

Fang²,

Karlsson³

et al. 2017

J of Risk & Insurance

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. 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. Terms of use: Documents in JEL Classification:G22, I11, I18

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“…According to Assuralia (2016), the professional association of insurance companies in Belgium, over 5.5 million Belgian citizens entered a private health insurance contract in 2014. Also, the German market features such contracts financed with a whole-life level premium that is contractually fixed until the policyholder dies, lapses or changes her cover (Christiansen et al, 2016).…”

Section: Introductionmentioning

confidence: 99%

“…As a result, the well-known hump-shape of the policy values becomes apparent, see Dickson et al (2013) Chapter 7for a discussion of policy values with a focus on life insurance products. Christiansen et al (2016) denote this health insurance funding strategy as individual whole-life balancing and stress that this is fundamentally different from guaranteed renewable short-term health insurance (Pauly et al, 1995) as well as time-consistent health insurance (Cochrane, 1995).…”

Section: Introductionmentioning

confidence: 99%

Lifelong Health Insurance Covers With Surrender Values: Updating Mechanisms in the Presence of Medical Inflation

et al. 2017

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This paper considers the problem of a lifelong health insurance cover where medical inflation is not sufficiently incorporated in the level premium determined at policy issue. We focus on the setting where changes in health benefits, driven by medical inflation, are accounted for by an appropriate update or indexation of the level premium, the policy value, or both premium and policy value, during the term of the contract. Such an updating mechanism is necessary to restore the actuarial equivalence between future health benefits and surrender values on the one hand, and available policy values and future premiums on the other hand. We extend existing literature (Vercruysse et al., 2013; Denuit et al., 2017) by developing updating mechanisms in a discrete-time framework, where medical inflation is only taken into account ex-post as it emerges over time and where surrender values are allowed for. We propose and design two types of surrender values: based on the ageing provision on the one hand and based directly on the premiums paid until surrender on the other hand. We illustrate our updating strategy with numerical examples, using Belgian data, and investigate the sensitivity of our findings with respect to elements from the technical basis (in particular: the lapse rates) used in the actuarial calculations. Our updating mechanism is generic and useful for a wide range of products in life and health insurance, where some elements of the technical basis are guaranteed while others are subject to revision according to policy conditions.

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Who is Changing Health Insurance Coverage? Empirical Evidence on Policyholder Dynamics

Cited by 17 publications

References 36 publications

Long-Term Health Insurance: Theory Meets Evidence

Long-Term Health Insurance: Theory Meets Evidence

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

Lifelong Health Insurance Covers With Surrender Values: Updating Mechanisms in the Presence of Medical Inflation

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