November 16, 2018

"Going Dutch" in regulating the mandatory coverage

Can universal access be achieved in a voluntary private health insurance market? Dutch private insurers caught between competing logics

Healthcare in The Netherlands is widely seen as a benchmark for many scholars. Though it is expensive, it combines mandatory coverage with the choice of private insurance coverage. Sounds of interest, though the devil is in the details.
This article explains the main issues surrounding such model:
The Dutch history of voluntary private health insurance shows both the strengths and weaknesses of public–private health insurance systems, especially in the context of a rising demand for (universal) access to health care. As we have explained, social and private health insurance are based on two divergent logics of different institutional orders (the market and the state).
The Dutch case strongly  suggests that universal access can only be achieved in a competitive individual private health insurance market if this market is effectively regulated. The tension between adverse selection and universal access that had vexed the Dutch private health insurance industry throughout its existence was resolved by combining elements from both the insurance logic and the welfare state logic: i.e. an individual mandate, guaranteed issue, community-rated premiums, income-related subsidies and a sophisticated risk equalization scheme .
Achieving universal access in a competitive private health insurance market is institutionally complex and requires broad political and societal support.
Therefore, unless there is a smart regulator, forget it...

PS. Spanish embroglio at Marginal revolution.

PS. How is Obamacare doing?



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