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

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