New trends in private health care insurance in Belgium
Contents The Belgian health care insurance system in a nutshell 1. New developments in the complementary health care insurance 2. market 26/04/2004 2
1.1. A generalised and generous social insurance N Generalised social insurance covering up to 78% of total health care expenses (budget 2004 : 16,3 bn EUR) N Employees : inpatient and outpatient care N Self-employed : essentially inpatient care (this difference will disappear in the near future due to harmonisation reforms) N Based on a price list defining the tariffs, the level of the legal reimbursement and the co-payment of the patient N Supplements can however be added by the provider N Time-gap between recognition and reimbursement N Complementary social protection via Maximum Bill on co- payments for low incomes (450 EUR) 26/04/2004 3
1.2. State controlled, but privately executed N Organised by a Sickness funds governmental institution 12% (RIZIV/INAMI) 15% N Basically financed with 44% social security contributions (85%) and completed with government subsidies (15%) 29% N Executed by private non- Christian Socialist profit organisations Independant Other (sickness funds) 26/04/2004 4
1.3. Actual scope of private health insurance N Complementing social insurance covering N co-payments, supplements and not yet legally reimbursed medical items N Private insurance : limited importance wrt total health cost, but growing at a rate of 14% pa (1995-2002) N Not insured expenses mostly related to ambulatory care Total health expenses Not insured 18% Insured 4% Legal 78% Assuralia (2002) 26/04/2004 5
1.4. Actual scope of private health Insurance N Wide-spread cover for inpatient care (in % of Belgian inhabitants) N 30% via group insurance N 10% via individual insurance N 20% via sickness funds N Insurance market of outpatient care is quite undeveloped because of N fiscal barriers for employer sponsored plans N and inefficient administrative processes � not an adequate value proposition 26/04/2004 6
Contents The Belgian health care insurance in a nutshell 1. New developments in the complementary health care 2. insurance market 26/04/2004 7
2.1. Towards more private insurance … Forecast Budget-GAP % of GDP 25 20 15 10 5 0 8 8 3 8 3 3 8 3 8 3 8 1 1 9 0 2 3 3 4 4 0 2 0 0 0 0 0 0 0 0 9 0 0 1 2 2 2 2 2 2 2 2 2 2 Legal Insur. 6,64% Gap Other Assuralia (2002) N Total health expenditures increase from 9% to 19% GDP 26/04/2004 8
2.1. … with a layer system N Private insurers are conscious of their role as a partner in health care insurance N Process of increased benefits in social insurance for unhealthy and low incomes already ongoing : maximum bill and higher reimbursement of chronic diseases N Budgetary constraints lead to an increase of the uninsured market N Private insurers will have to deal with access to insurance 26/04/2004 9
2.2. Towards more regulation …. N No specific regulation for health care insurance N Upcoming regulation to guarantee N A life-time health insurance N continuity when leaving a group insurance N and life-time contracts in individual insurance N Access to an affordable health insurance (inpatient care) N non-applicability of selection at entry in group insurance N access to individual healthcare insurance N Limited impact of pre-existing conditions 26/04/2004 10
2.2. …. proposal of private insurers N Proposal of private insurers (inpatient care) N Guarantee access for a standard cover (excluding the private room) N With a maximum premium amount N Organise a solidarity mechanism for uninsurable risks between insurers 26/04/2004 11
2.3. Towards customer responsibility … Segmentation N The darker the more expensive for inpatient care N Two main solutions N a geographical premium segmentation N or a behaviour driven reimbursement segmentation 26/04/2004 12
2.4. Towards more service … N Most insurers recently adopted TPP-systems for inpatient care N Medi-Assistance : based on the concept of assistance N MediCard, Assurcard : based on the concept of a credit card N TPP-systems generally increase healthcare costs N At this stage, the impact on claims cost is not yet quantified 26/04/2004 13
2.5. Towards a level playing field … N Sickness funds also offer complementary insurances in competition with private insurers N Insurance regulations are not applicable N Advantageous tax legislation N The Belgian courts judged N that sickness funds are operating on the market as far as complementary insurance is concerned N that a different legal framework is not in contradiction with the principle of equal treatment wrt Belgian legislation N The question is whether these judgements are compatible with European legislation : illegal government aid and insurance directives 26/04/2004 14
Conclusion N A turnaround for complementary private healthcare insurance in Belgium N As a valuable partner for the government N In a competitive customer-focused environment 26/04/2004 15
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