There are two ways of seeing the story narrated in this book and to envision the answers it provides to our research questions. Readers primarily interested in health policy will find in the subsequent chapters a discussion of the interactions of two trends (marketization and privatization) that arguably stand at the forefront of the debates related to this field, yet that have been subjected to only scant discussion in conjunction with EU influence. Those who are mostly interested in the insurance industry and more broadly, financial services regulation, might also find an interest in reading this volume. Scholars are now paying increasing attention to this sector of prime importance for our understanding of the political economy of contemporary capitalism. Still, the literature has to date mainly focused on large transnational firms and on life insurance, arguably at the forefront of the changes affecting the wider industry (see Graz 2019). Here they will find an analysis of its transformations from a different standpoint, allowing for an appreciation of some of the many side effects associated with the regulatory and industrial changes it has experienced in Europe over the last 30 years. After introducing the different contributions to this book, we return to these questions in a discussion of the wider implications of our findings for current debates on these two broad classes of issues.
4.1 Contributions to the Book
The book opens with Gaël Coron and Marion Del Sol’s analysis of the long march towards a unified European government for insurance activities, starting off with the adoption of “first generation” (1973) and culminating with “third generation” Insurance directives in 1992—the latter having constituted a critical juncture for the private health insurance industry in most countries (Chap. 2). Coron and Del Sol particularly insist in this chapter on the proactive role played in this domain by European Commission services in charge of financial institutions and corporate law, who have made an intensive use of ECJ rulings to advance their own visions and agendas for the sector. More generally, what he describes is a process leading to a twofold trivialization. On the one hand, and as a result of the Commission officials’ political work, insurance activities were growingly assimilated to financial services and treated as such, leading to various implications for their regulation in the Single Market. This overall trend was paralleled with a more discrete yet significant trivialization of private (mostly non-profit) health insurance companies, gradually associated with the rest of the insurance activities—notably through Insurance directives in 1992.
In Chap. 3, Cyril Benoît examines the fierce political battles that led to the far-reaching reform of solvency rules governing insurance activities in the EU between 1994 and 2016, with special reference to the private health insurance industry. Focusing on the prudential regime laid down in EU law and regulation, he shows that the adoption of Solvency II in 2009 amplified the movement described by Coron, albeit through a renewed approach. While previous directives were essentially preoccupied with finding common rules to organize competition within the Single Market, Solvency II developed as a more conceptual architecture, with rules, requirements and standards aimed at becoming ingrained in insurers’ daily activities. This shift was essentially legitimized as providing greater transparency and safety to financial investors and policyholders. Benoît shows that this transformation is fundamentally more likely to induce major changes for private health insurers (notably non-profit and smaller firms), as their activities have developed using different principles, values and ruling structures.
After a focus in Part I on the sizeable European regulatory infrastructure that developed over the last three decades, Part II starts with an extensive, large-n study of the differentiated implications it may have on PHI in various Member States (Chap. 4). In this regard, Marion Del Sol and Philippe Martin, with a particular focus on the competitive framework created by Insurance directives, arrive at a twofold conclusion. First, EU law and regulation might effectively be considered as a potential vehicle for the increasing marketization of the sector, particularly in those countries where private health insurers are non-profit firms and closely integrated into Welfare State institutions. Yet, and crucially, it should be symmetrically regarded as providing a matrix rather than being a source of vertical integration—as it is actually flexible and open to interpretation, and as it leaves a wide latitude for national regulation of the PHI industry, including its relation with public providers. As such, one can expect a high degree of contingency and many possible usages of this legal framework in its transposition at domestic level.
In their study of the impact of Solvency II, Philippe Abecassis and Nathalie Coutinet draw a similar conclusion from the vantage point of the insurance industry per se (Chap. 5). It is right, they assert, to expect that EU law and regulation result in an increasing homogenization of private health insurers, in the sense of their growing alignment with the behaviours, strategies and logics already in play in significant segments of the sector. Yet, the pattern suggested by their data is more complex than what this broad-brush picture suggests. Indeed, the financialization of PHI (and notably, mergers and takeovers) does not coincide with the business cycle of the rest of the industry. This does not mean that the impact of EU law and regulation was neutral. Insurance directives provided strong incentives for PHI to develop transnational activities; Solvency II, as it involves stricter solvency requirements, incentivized larger dominant firms to diversify their risk portfolios, leading to alliances with PHI or to the development of health-related products—as the latter are less demanding in terms of solvency requirements. However, this matrix, Abecassis and Coutinet argue, is better understood as providing a basis for various strategies than as an exogenous shock implying a standardised response. For the time period considered, it even appears that national reforms played a more decisive role in providing constraints and opportunities to PHI.
These converging statements are followed in Part III by in-depth country case studies. Cyril Benoît and Marion Del Sol (Chap. 6) first consider the case of Belgium, where the “public” side of health coverage is delegated and organized around non-profit private health insurers, namely mutual benefit societies—and as such is excluded from the perimeter of EU insurance law and regulation. Over the last two decades, and as a result of various governmental attempts at reducing health expenditure, mutual benefit societies nevertheless developed and managed on their own a variety of complementary coverage, initially without any formalized legal boundaries. This situation was challenged during the 2000s by for-profit insurance companies seeking to penetrate the market. In this context, they used both Insurance and Solvency II directives in their search for supranational support, in order ultimately to challenge the position of mutual benefit societies. In turn, the latter responded by working politically to secure their position at domestic level. As a result of these political struggles, a reform adopted in 2010 reinforced several features of the Belgian public-private mix by safeguarding the position of mutual benefit societies for complementary coverage. But this same reform also opened the supplementary side of health coverage to competition and aligned it with EU provisions, thus marketizing a share of the public-private mix in Belgium—with recent figures suggesting that this new pillar is now rapidly expanding.
Mutual benefit societies might also be found in France, as explained by Gaël Coron, Thomas Houssoy and Cyril Benoît in their contribution (Chap. 7). Historically, however, their activities were circumscribed to the complementary share of health coverage, where they have to compete with other non-profit entities and (increasingly) for-profit insurance companies. What has happened in the country, Coron, Houssoy and Benoît argue, is an early and manifold marketization process of private health insurers as a result of the application of EU law and regulation—but decisively, this trend was markedly reinforced and shaped by a series of policies adopted at national level. Indeed, over the last 20 years, successive French governments have tried to increase health coverage without expending the share already covered by the public purse. This strategy ostensibly involved private health insurers in achieving several governmental objectives, yet the prior effects of Europeanization on these entities were poorly acknowledged by policymakers. As such, the many consequences associated with the rise of a “European-driven” market now increasingly conflict with a “State-driven” market.
While Europeanization was associated with greater marketization of the public-private mix in healthcare in Belgium and France, this has initially not been the case in Ireland, as argued by Pascale Turquet and Philippe Martin in their contribution (Chap. 8). In this “two-tiered” system, private health insurance duplicates public coverage by offering additional benefits and services such as access to private hospitals. While there is competition on the PHI market in Ireland in application of EU legal provisions, the Irish government succeeded in maintaining strong regulation of the sector due to the important role it plays in the provision of care. This was notably achieved through an exemption of (semi-public) non-profit firms from compliance with Insurance directives and through a risk-equalization scheme. However, this initial compromise was increasingly contested in the 2000s, with new entrants on the market trying to use European provisions to challenge the position of their competitors. This also coincided with debates on whether Voluntary Health Insurance (VHI) Healthcare, the non-profit leading firm of Irish PHI market, should comply with solvency requirements. These turbulences were amplified by the consequences of the financial crisis, which significantly raised the cost of insurance policies over the last few years.
Turquet and Martin then turn to an examination of the case of The Netherlands, a country where health policy has been market-oriented since the beginning of the 1990s. The system is now characterized by managed competition between health insurers, and the government only retains regulatory and supervisory prerogatives (Chap. 9). In this country, EU law and regulation was thus not the only—or the main—source of marketization. In addition, there seems to be no contradiction between the latter’s most market-like dimensions since similar features are arguably in play in the Dutch healthcare system. However, and crucially, Turquet and Martin show that it does not necessarily mean that Europeanization has had no effect on the country. Solvency rules on insurance activities as well as the degree of openness of the market (in close relation to the policies pursued by the Dutch Central Bank) notably constituted major issues, with collateral implications for the public-private mix in the course of recent years.
In the last contribution to the book, Thomas Houssoy, Marion Del Sol and Philippe Martin adopt a more prospective stance by reflecting on some additional repercussions of the transformations observed in the previous chapters (Chap. 10). In the four countries under study, PHI is now more marketized than it was at the beginning of the 1990s, even if the shape and the very reasons for the development of health insurance markets differ from one country to another. What are the specific implications of such changes when PHI turns out to be acquired at corporate level, and thus becomes part of occupational welfare? More precisely, how do firms and trade unions behave in such marketized environments when they become purchasers of private health coverage? What are the related implications of their choices for the distribution of solidarities within the public-private mix? After a discussion of the many ramifications of these questions (which ostensibly resonate with the literature on pension reform and the pillarization of social protection), Del Sol, Martin and Houssoy consider the French case, viewing it as a quasi-natural experiment. Indeed, while once limited in scope, corporate PHI grew significantly in this country after a reform in 2013, which introduced an obligation for employers to provide their workers with a PHI scheme. Crucially, it came into force in an environment already reshaped in the sense of a greater marketization of PHI by prior reforms.
Each of these chapters comes with its own conclusions and series of responses to our research questions. Additionally, we think that the book in itself generates further insights on two broader debates in the literature that are worth briefly introducing before allowing the reader to enter into the many complexities of the relationship between private health insurance and the European Union.
4.2 Understanding the Presence of Financial Firms in Social Policy
The various conclusions raised in the aforementioned chapters explicitly echo a wider controversy in the political economy literature. Political economists have indeed long debated whether and why capital—often equated with employers—tended to express support for or oppose social protection (see Hall and Soskice 2001). More recently, scholars have argued that our understanding of “capital” should also include financial firms, since as potential competitors of social insurance, they can reasonably “be expected to be key proponents of retrenchment” to become integral participants of social coverage (Naczyk 2013). The book provides this burgeoning literature with additional accounts on why financial firms—here insurance companies—might have an interest in prospering in social protection or policy, particularly in a more protected and less lucrative market, as health insurance undoubtedly is.
Admittedly, and by paving the way for a removal of some of the barriers that integrated PHI into the Welfare State, EU provisions considerably eased access to this market to other (essentially for-profit) insurance companies. One can note that their presence increased in the four countries for the period under study, but crucially, this was not as a result of an explicit (or an implicit) European political agenda—as health insurance, as shown in Chap. 2, was a theme of particularly little importance during the debates surrounding Insurance directives. In a similar vein (and more fundamentally) several chapters of the book argue that this also has to do with the incentives created by Solvency II, while the goal of this text was initially to strengthen regulation and improve regulatory standards. What is described in the following pages is that by imposing stricter requirements, EU provisions created a very powerful incentive for for-profit insurance companies to diversify, notably on more secured markets such as healthcare (see Chaps. 2, 3 and 4). As such, the presence of insurance companies (and their demands, as exemplified by the case of Belgium, for government to facilitate their access to the health insurance market—see Chap. 6) also appear to be a side effect of an overall increase in regulatory requirements.
Put differently, an apparent consolidation of regulatory demands for the wider industry here resulted, at least in some of its segments, in increasing pressures and financialization. This does not necessarily contradict the finding reported by studies identifying more explicit attempts by financial companies to gain access to social protection, and country case studies in Part III provide evidence of more direct and more classical forms of interest group politics. But this arguably provides a set of additional factors of the formation of the structure of opportunity that shape financial firms’ behaviours and motivations in this domain—as we highlight how social protection might be unintentionally affected by wider transformations of financial services regulation. A similar statement arguably applies to related debates on the financialization of social protection. Here also, we report, especially in Chaps. 3, 4 and 7, an increasing financialization of health insurers, notably non-profit insurance companies. And here again, we show how it is an outcome (and to some extent a side effect) of the stricter solvency requirements demanded by Solvency II. In our view, such findings should invite political economists to pay greater attention to multilevel changes and unexpected outcomes of past regulatory choices when they seek to understand why and how there is a rise of financial firms or financialization in social protection.
4.3 The EU and the Shifts in the Public-Private Mix in Healthcare
As already suggested at the beginning of this Introduction, the literature on EU healthcare politics has essentially focused on the propensity of Europeanization to diffuse a number of (notably regulatory) standards, to alter health services delivery and policies through the application of internal law and to stimulate budgetary austerity—three features largely exhibited in the case of PHI. This book hopefully helps to make another aspect more explicit, which complements rather than disputes the already known faces of EU healthcare politics as documented in the literature. This aspect relates to how Europeanization contributes to the reshaping of the public-private mix in healthcare in two ways, amply discussed in Chaps. 6, 7, 8 and 9. Firstly, it can introduce competition within the sector (or facilitate competition where it already exists), together with the alignment of non-profit and for-profit providers. Secondly (and less noticeably), because Europeanization might result in an institutional decoupling between PHI and Welfare State institutions. This, in turn, renders public and private coverage more sealed off from each other. In addition to modifying the nature of health coverage, such reconfiguring might also affect the scope of health policy (as illustrated by the case of France studied in Chap. 7). As a result, Europeanization here is not necessarily “shifting the public-private mix” (Seeleib-Kaiser et al. 2012), but rather reinforcing its institutional (and possibly financial) sedimentation. This latter statement will certainly sound familiar to those who know the literature dedicated to the political economy of pension reform and policies, where scholars are accustomed to speaking in terms of pillarization and multi-pillar structures—and where they are accustomed, too, to studying marketization in close connection with privatization in broad “multi-pillar” settings (see Ebbinghaus 2015). There are a number of issues involved when the public-private mix in healthcare is analysed in the language of pillars, as discussed in Chap. 10. But we strongly think that there is something to be gained from keeping a watchful eye over some similar transformations arguably at play between the two sectors, in close connection with the role of the EU and, more broadly, Europeanization. We also believe that this holds true even if, in stark contrast with pension reform, the changes that are described here are mostly unintended outcomes of the interactions between various EU and national policy choices, and are not (or not yet) part of an explicit political agenda to combine pillarization with various forms of privatization and marketization of the public-private mix in healthcare. Yet some critical outcomes (that prominently include marketization, a segmentation of coverage and growing presence of financial firms) are now changing both sectors, which are arguably at the crossroads of national “growth regimes” (Hassel and Palier 2020).