The price of getting older Health insurance for the elderly in the Netherlands, 1956-1986 R.A.A. Vonk

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The price of getting olderHealth insurance for
the elderly in the Netherlands, 1956-1986R.A.A.
Vonk
Centre for the history of health insurance, dept.
Medical Humanities
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Centre for the history of health insurance, dept.
Medical Humanities

• Centre for the history of health insurance,
  funded by
• Ministry of Health, Welfare and Sports
• Zorgverzekeraars Nederland
• Innovatiefonds Zorgverzekeraars
• Main objectives
• research to the history of health insurance,
  social security and the welfare state in the
  Netherlands and elsewhere
• collect and preserve relevant historical archives
  (sickness funds, private health insurers, sector
  organizations, etc.)

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Centre for the history of health insurance, dept.
Medical Humanities

• Recent and upcoming publications
• Tussen volksverzekering en vrije markt (2008)
• Two centuries of solidarity (2009)
• The insured as stakeholder in the health
  insurance market (2009)
• Insurance of catastrophic medical risks. An
  international comparison (2010)
• Private health insurance and civil society in the
  Netherlands, 1900-2006 (2013)

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Bejaardenverzekering 1956-1986
Centre for the history of health insurance, dept.
Medical Humanities

• Its place in the broader system of social health
  insurance schemes in the Netherlands
• Development of the scheme from 1956 onwards
• The effects of risk spreading and solidarity
• Past experiences and future prospects?

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Health insurance for the elderly during the 19th
century
Centre for the history of health insurance, dept.
Medical Humanities

• Sickness funds (mostly commercial or
  philantropical in nature) employed age-limits for
  new applicants
• Sickness funds usually cancelled the insurance
  when the insured reached the age of 60
• Government enforces the Poor Law (1854) to
  provide for coverage of medical expenses of
  people with no income at all (municipal
  authorities, church).

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Health insurance for the elderly, 1900-1941
Centre for the history of health insurance, dept.
Medical Humanities

• Sickness funds (mostly association funds and
  mutual workers funds) still employed age-limits
  for new applicants
• Cancellation of the insurance when reaching the
  age of 60 no longer customary
• Sickness fund premiums too high for most elderly
• Poor Relief remained primary source for the
  coverage of medical expenses for the elderly

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A.S. Talma, Minister of Labour (1908-1912)
Centre for the history of health insurance, dept.
Medical Humanities

• Sickness Benefits Act
• General Disability and Elderly Benefits Act

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General Disability and Elderly Benefits Act
Centre for the history of health insurance, dept.
Medical Humanities

• Cash and service benefits
• Small pensions for elderly and disabled workmen
• Service benefits primarily aimed at the disabled
• Poor Relief remained important

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Sickness funds Decree, 1941
Centre for the history of health insurance, dept.
Medical Humanities

• German authorities imposed a tripartite system
• compulsory social health insurance for wage
  earners and their dependants
• voluntary social health insurance for non-wage
  earners
• private health insurance
• Social health insurance schemes and private
  health insurance seperated by an income limit

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The compulsory social health insurance scheme
Centre for the history of health insurance, dept.
Medical Humanities

• income related premiums
• employer pays half of the premium
• retrospective reimbursement through General Fund
• government determined package of service
  benefits
• compulsory enrolment
• obligatory acceptance of all eligible applicants
  and their dependents (children, spouses)

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Voluntary social health insurance scheme
Centre for the history of health insurance, dept.
Medical Humanities

• - community rated premiums
• no retrospective reimbursement
• open enrolment
• - obligatory acceptance of all eligible
  applicants
• - government determined package of service
  benefits

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Health insurance for the elderly 1945-1956
Centre for the history of health insurance, dept.
Medical Humanities

• 1941 elderly made eligible for the voluntary
  social health insurance scheme
• 1947 enforcement of the Provisional law on
  Elderly Benefits
• 1947 elderly made eligible for the compulsory
  social health insurance scheme

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W. Drees, Minister of Social Affairs (1945-1948)
Centre for the history of health insurance, dept.
Medical Humanities

• Provisional law on Elderly Benefits
• Father of social security

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Social health insurance for the elderly, 1957
Centre for the history of health insurance, dept.
Medical Humanities

• 1957 enforcement of the AOW (General Elderly
  Pensions Act), a national insurance scheme
  providing for retirement pensions for all people
  aged 65 or older living in the Netherlands
• 1957 creation of the elderly social health
  insurance scheme

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J.G. Suurhoff, Minister of Social Affairs,
1952-1958
Centre for the history of health insurance, dept.
Medical Humanities

• Enforcement of the AOW and the elderly social
  health insurance scheme

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Elderly social health insurance scheme, 1957
Centre for the history of health insurance, dept.
Medical Humanities

• Open enrolment
• Age-limit 65 or older
• Income-limit linked with the height of the AOW
  pensions (1957 fl. 3410,-)
• Premiums would cover only ¼ and ½ of the
  estimated expenses per insured person per year.
  Premium shortfall replenished by government and
  General Fund
• Dependents (children, spouses) insured free of
  charge

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Elderly social health insurance scheme
Centre for the history of health insurance, dept.
Medical Humanities
Government contributions
General fund compulsory scheme
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Centre for the history of health insurance, dept.
Medical Humanities
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Elderly social health insurance scheme
Centre for the history of health insurance, dept.
Medical Humanities

• Elderly health insurance meant as a safety-net
  insurance scheme for low-income elderly
• Government tried to keep the membership base at
  a minimum to satisfy employers
• 632.500 (/- 63 of all) elderly applied for
  elderly health insurance in 1957

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Elderly and voluntary social health insurance,
1969-1970
Centre for the history of health insurance, dept.
Medical Humanities

• High inflation-rate causes problems in the
  elderly health insurance scheme
• First signs of a fatal premium spiral in the
  voluntary health insurance scheme
• Government asks the SER (Socio-Economic Council)
  for advice

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SER-advice of 1969
Centre for the history of health insurance, dept.
Medical Humanities

• Try to transfer elderly from the voluntary
  scheme to the elderly social health insurance
  scheme, by
• increasing the income-limit to 70 of the
  income-limit of the compulsory scheme
• creating additional bandwidths (premiums covering
  ? and ? of the estimated expenses per insured
  person per year)
• reducing the premiums for middle income elderly

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Elderly and voluntary social health insurance,
1969-1970
Centre for the history of health insurance, dept.
Medical Humanities

• The reform fo the elderly and voluntary social
  health insurance schemes fails
• Only 140.000 of the expected 250.000 elderly opt
  for insurance under the elderly scheme
• single people didnt benefit
• bad reputation?
• Employers refused to increase contributions to
  fund premium reduction

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Centre for the history of health insurance, dept.
Medical Humanities
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Elderly and voluntary social health insurance,
1970-1980
Centre for the history of health insurance, dept.
Medical Humanities

• A worsening economic crisis forces the Den Uyl
  (1973-1977) government to invest heavily in
  premium reduction schemes for the elderly
• The height of AOW pensions didnt keep up with
  the inflation-rate
• Cumulating tax and premium surcharges affect
  middle-income elderly (AOW-plus-problem)
• 1980 government contributions to the elderly
  health insurance scheme have risen to 1.5 billion
  guilders

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J.P. van der Reijden, State Secretary of Health
Centre for the history of health insurance, dept.
Medical Humanities

• WTZ (Health Insurance Access Act)
• MOOZ (Act on the Co-funding Over-representation
  Elderly Sickness fund Insured)

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The WTZ and reform of the elderly social health
insurance scheme, 1982-1986
Centre for the history of health insurance, dept.
Medical Humanities

• Spreading of risk in the elderly social health
  insurance scheme had worsened (more elderly and
  older elderly)
• Voluntary social health insurance scheme failed
  due to an increasingly weakening financial basis
• percentage of elderly insured under the scheme
  rose from 10 to 20 of the total vol. ins. pop.
  during the seventies.
• Both social health insurance schemes to be
  reformed at the same time

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The WTZ and reform of the elderly social health
insurance scheme, 1982-1986
Centre for the history of health insurance, dept.
Medical Humanities

• Both elderly and voluntary social health
  insurance were dissolved
• The membership base of the elderly social health
  insurance scheme was transferred to the
  compulsory social health insurance scheme
• Regulating the private health insurance sector
• Standard coverage package policy
• Obligation to accept everyone for this policy
• Act on the Co-funding Over-representation
  Elderly Sickness Fund Insured (cross-subsidization
  )

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Conclusions
Centre for the history of health insurance, dept.
Medical Humanities

• Bejaardenverzekering as a hybrid health
  insurance scheme with traits from both the
  compulsory and the voluntary scheme
• Elderly health insurance started as a safety-net
  insurance scheme, but developed into a broad
  health insurance scheme for roughly 75 of all
  Dutch elderly
• Increasing need for large external contributions

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Conclusions
Centre for the history of health insurance, dept.
Medical Humanities

• Influx of more elderly into the elderly health
  insurance scheme resulted in a worsening risk
  equation
• Loosening bonds of solidarity between retiree,
  employee and employer
• 1986 government enforces solidarity and creates
  a system of cross-subsidization

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Future prospects?
Centre for the history of health insurance, dept.
Medical Humanities

• The Dutch elderly social health insurance not
  unique
• Medicare (USA)
• Health Service System for the Elderly (Japan)
• Some sort of solidarity between wage-earners and
  retirees is necessary to keep premiums affordable
  for elderly
• External contributions (government,
  cross-subsidization, etc.)

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Thank you for your attention !
Centre for the history of health insurance, dept.
Medical Humanities