SLIDE 1
1
2
Outline of presentation
- Current system
- Why the change ?
- New Standard Insurance Cover
–
Coverage
–
Premium
–
Insurers
–
Cash-flows
- Actuarial Challenges
The Dutch Health Care System in Transit! Finally? Ad A.M. Kok - - PowerPoint PPT Presentation
The Dutch Health Care System in Transit! Finally? Ad A.M. Kok - - PowerPoint PPT Presentation
The Dutch Health Care System in Transit! Finally? Ad A.M. Kok AAG Dresden 28 April 2004 1 Outline of presentation Current system Why the change ? New Standard Insurance Cover Coverage Premium Insurers
SLIDE 2
SLIDE 3
3
Current system
- Both public and private medical care
insurances
- Three compartments
1.
‘non-insurable’ risks: public / social security (AWBZ)
2.
more common curative care – dual system: low income levels : public (ZFW) high income levels : private
3.
supplementary care : private
SLIDE 4
4
Use of Health Care Insurance
According to type of insurance in 2nd compartment (January 2003)
Source: Vektis
62% 35% 3%
Public (ZFW) Private Balance
SLIDE 5
5
Total net expenditure
41,985 Total
6,940 Private Insurances (2nd and 3rd compartment) 1,008 Supplementary next to ZFW (3rd compartment) Private 15,502 ZFW (2nd compartment) 18,536 AWBZ (1st compartment) Public 2002
€ millions
Source: Vektis, CBS
SLIDE 6
6
Net expenditure 1st compartment
Per sector (2002)
18% 23% 57% 2% Care for mentally ill Care for handicaped Care for the elderly, including homecare and nursing home Other
Source: CVZ
SLIDE 7
7
Net expenditure 2nd and 3rd compartment
Per sector (2002)
49% 7% 18% 6% 20%
Hospitalization Specialist care Pharmaceuticals General Practitioner Other
Source: Vektis, CVZ
SLIDE 8
8
Why change the system?
Flaws current system:
Uncontrollable expenditure increase
1993: € 26.0 million 2003 (estimated): € 40.7 million
Unbalanced supply and demand (waiting lists)
SLIDE 9
9
Solution
More market, less government regulation One system Same incentives and interests for all parties
SLIDE 10
10
Earlier attempts
Several earlier attempts to create one system:
Hendriks 1970’s Dekker Committee late 1980’s Simons 1990’s
Current attempt seems successful Planned introduction: January 1st 2006
SLIDE 11
11
But still … uncertainty
Proposed design is currently under discussion in Parliament
SLIDE 12
12
New Standard Insurance Cover
Private insurance with public boundary
conditions
Compulsory insurance Compulsory acceptance Premium differentiation based on age or health
status prohibited
No-claim refund Risk equalization between insurers
SLIDE 13
13
Coverage Transition
1st compartment 2nd compartment 3rd compartment Standard Insurance Cover Supplementary Current situation New situation Revised AWBZ & Local Govt.
SLIDE 14
14
Premium
Partly depending on income; partly nominal Employer pays income-depended part Self-employed pays both premium parts Government pays for minors Low incomes will get some tax relief
SLIDE 15
15
Premium (cont.)
Income depending premium:
Set by government Paid by employer Put in fund and used for risk equalization
Nominal premium:
Set by insurer (variable) Paid by insured
SLIDE 16
16
Coverage Variations
New legislation will set out global terms of
cover, but details are filled in by insurer
Both in kind and restitution system allowed Different deductibles possible next to no-claim Different covers depending on region possible Supplementary cover next to Standard
Insurance Cover
SLIDE 17
17
Insurers in new market
Insurers will compete on:
- level of nominal premium
- quality of bought-in care
Not all insurers can join in:
- requirements
- official admission by government
SLIDE 18
18
Opportunities private insurers
Insurers are allowed to make profit and
distribute it to the shareholders
Supplementary cover Insurer does not have to set up a contract with
each healthcare supplier ? stronger position in negotiations
Risk equalisation ?
‘high risks’ not necessary unprofitable
SLIDE 19
19
Cash flow s
Insurance Company Insured employee Self employed Government (minors) Healthcare supplier
Possibly via insured Income depended premium Nominal premium
Employer
Risk Equalization Fund
Supplementary premium
SLIDE 20
20
Undesirable behaviour
Insurer can fill in details Standard Insurance
Cover ? risk selection
Large supplementary packages decrease
mobility elderly and chronically ill
SLIDE 21
21
Actuarial challenges
Premium setting Setting up a risk equalization system
An equalization system already exists for current 2nd compartment public insurance (ZFW)
Reserving under a risk equalization system Matching financial requirements Standard
insurance with other developments
SLIDE 22
22
Other developments
New monitoring concepts Dutch Supervisor
Three tests: Minimum, Solvency, Continuity
IFRS
Phase I : Definition Insurance contract, Disclosure Phase II : Fair Value liabilities
Solvency II
EU Solvency concepts
SLIDE 23
23
Time frame
2004 2005 2006 2007 2008 IFRS Phase I Standard Insurance FTK IFRS Phase II Solvency II
SLIDE 24
24