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Choice of insurer for basic health insurance restricted by supplementary insurance

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Abstract

Choice of insurer is an essential precondition for efficiency in healthcare systems based on regulated competition. However, supplementary insurance (SI) may restrict choice of insurer for basic health insurance (BI) due to a joint purchase of BI and SI. Roos and Schut (Eur J Health Econ 13(1):51–62, 2012) found that the belief in not being accepted by another insurer for SI was an important reason for not switching insurer for BI for 4 % of the non-switching Dutch population in 2006. This increased to approximately 7 % in 2009. In this paper, we provide evidence that in 2011 and 2012 approximately 10 % of the Dutch population expected that another insurer would not accept them for SI. An additional 20 % of the consumers expected to be accepted by another insurer, but only for a higher premium than other consumers with the same SI. About one-third of the elderly (55+) consumers, and more than half of the consumers with bad or moderate health status, expected their current insurer to offer them more favourable conditions for SI, in terms of acceptance and premium, than other insurers do for similar SI. However, if dissatisfied high-risk consumers, due to a joint purchase of BI and SI, do not switch insurer for BI, the disciplining effect of ‘voting with one’s feet’ is substantially reduced. This is a serious problem that may increase in coming years. We discuss several potential solutions. Our conclusion is that the integration of BI and SI into one basic-plus-insurance is an effective solution under current EU legislation. This conclusion may also be relevant for other countries.

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Notes

  1. The introduction of a BPI may further encourage competition by eliminating current features of SI that are important restrictions for high-risk consumers to switch insurer.

  2. If low-risk consumers no longer take out SI or switch to another SI or a BPI, the risk profile of the old contract will worsen (adverse selection) and insurers will have to charge high-risk consumers a high, actuarially fair premium [19].

  3. Because SI is subject to the Third European Non-life Insurance Directive (see “Potential solutions” section), the Dutch government is not allowed to legally oblige consumers to take out BI and SI from the same insurer. In Belgium, the regulations concerning SI may be in conflict with the Third European Non-life Insurance Directive [24].

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Acknowledgments

We would like to thank Anne-Fleur Roos, Erik Schut, Ilaria Mosca, Kayleigh van Winssen and two anonymous referees for their helpful comments on earlier drafts.

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  1. Institute of Health Policy and Management, Erasmus University Rotterdam, P.O. Box 1738, 3000 DR, Rotterdam, The Netherlands

    Daniëlle M. I. D. Duijmelinck & Wynand P. M. M. van de Ven

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  1. Daniëlle M. I. D. Duijmelinck
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  2. Wynand P. M. M. van de Ven
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Correspondence to Daniëlle M. I. D. Duijmelinck.

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Duijmelinck, D.M.I.D., van de Ven, W.P.M.M. Choice of insurer for basic health insurance restricted by supplementary insurance. Eur J Health Econ 15, 737–746 (2014). https://doi.org/10.1007/s10198-013-0519-7

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  • DOI: https://doi.org/10.1007/s10198-013-0519-7

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