The price of getting older
Health insurance for the elderly in the Netherlands, 1956-1986
R.A.A. Vonk
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.)
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)
Centre for the history of health insurance, dept. Medical Humanities
Bejaardenverzekering 1956-1986 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?
Centre for the history of health insurance, dept. Medical Humanities
Health insurance for the elderly during the 19th century 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).
Centre for the history of health insurance, dept. Medical Humanities
Health insurance for the elderly, 1900-1941 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
Centre for the history of health insurance, dept. Medical Humanities
A.S. Talma, Minister of Labour (1908-1912) Sickness Benefits Act General Disability and Elderly Benefits Act
Centre for the history of health insurance, dept. Medical Humanities
General Disability and Elderly Benefits Act
Cash and service benefits Small pensions for elderly and disabled
workmen Service benefits primarily aimed at the disabled
Poor Relief remained important
Centre for the history of health insurance, dept. Medical Humanities
Sickness funds Decree, 1941 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
Centre for the history of health insurance, dept. Medical Humanities
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)
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
Health insurance for the elderly 1945-1956 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
Centre for the history of health insurance, dept. Medical Humanities
W. Drees, Minister of Social Affairs (1945-1948)
Provisional law on Elderly Benefits‘Father of social security’
Centre for the history of health insurance, dept. Medical Humanities
Social health insurance for the elderly, 1957 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
Centre for the history of health insurance, dept. Medical Humanities
J.G. Suurhoff, Minister of Social Affairs, 1952-
1958 Enforcement of the AOW and the elderly social health insurance scheme
Centre for the history of health insurance, dept. Medical Humanities
Elderly social health insurance scheme, 1957 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
Centre for the history of health insurance, dept. Medical Humanities
Elderly social health insurance scheme
General fund compulsory scheme
Government contributions
Centre for the history of health insurance, dept. Medical Humanities
Centre for the history of health insurance, dept. Medical Humanities
Elderly social health insurance scheme 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
Centre for the history of health insurance, dept. Medical Humanities
Elderly and voluntary social health insurance, 1969-1970 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
Centre for the history of health insurance, dept. Medical Humanities
SER-advice of 1969 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 ⅝ and ⅞ of the estimated expenses per insured person per year)
reducing the premiums for middle income elderly
Centre for the history of health insurance, dept. Medical Humanities
Elderly and voluntary social health insurance, 1969-1970
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 didn’t benefit bad reputation?
Employers refused to increase contributions to fund premium reduction
Centre for the history of health insurance, dept. Medical Humanities
Centre for the history of health insurance, dept. Medical Humanities
Elderly and voluntary social health insurance, 1970-1980 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 didn’t 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
Centre for the history of health insurance, dept. Medical Humanities
J.P. van der Reijden, State Secretary of Health
WTZ (Health Insurance Access Act) MOOZ (Act on the Co-funding Over-representation Elderly Sickness fund Insured)
Centre for the history of health insurance, dept. Medical Humanities
The WTZ and reform of the elderly social health insurance scheme, 1982-1986 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
Centre for the history of health insurance, dept. Medical Humanities
The WTZ and reform of the elderly social health insurance scheme, 1982-1986 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)
Centre for the history of health insurance, dept. Medical Humanities
Conclusions 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
Centre for the history of health insurance, dept. Medical Humanities
Conclusions
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
Centre for the history of health insurance, dept. Medical Humanities
Future prospects?
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.)
Centre for the history of health insurance, dept. Medical Humanities
Thank you for your attention !
Centre for the history of health insurance, dept. Medical Humanities