The Potential for Risk Rating in Competitive Markets for Supplementary Health Insurance: An Empirical Analysis

Francesco Paolucci ()
Additional contact information
Francesco Paolucci: The Australian National University

Chapter Chapter 4 in Health Care Financing and Insurance, 2011, pp 47-63 from Springer

Abstract: Abstract Many countries are considering the option of reducing the share of mandatory basic health insurance (BI) and to increasingly rely on voluntary supplementary health insurance (SI) schemes to cover health care expenditures. In theory, competitive markets for SI tend to risk-rated premiums. After discussing the determinants of risk rating in competitive SI markets, we estimate the potential for risk rating due to the transfer of benefits from BI to SI coverage. For this purpose, we simulate several scenarios in which benefits covered by BI are transferred to competitive markets for SI. We use a dataset from one of the largest insurers in the Netherlands, to calculate the potential premium range for SI resulting from this transfer. Our findings show that, by adding risk-factors, the minimum SI premium decreases while the maximum increases. Moreover, we observe that risk rating primarily affects the maximum premium. The magnitude of the premium range is especially substantial for benefits such as medical devices and drugs. For these services the potential consequences of risk rating in terms of access to affordable insurance coverage may be considered not “socially acceptable”, since they result in high SI-premiums for certain risk/income groups. Therefore, when transferring benefits from BI to SI policy makers should be aware of the implications for the affordability of insurance coverage.

Keywords: Risk Rating; Dental Care; Risk Adjuster; Sickness Fund; Demographic Model (search for similar items in EconPapers)
Date: 2011
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:dehchp:978-3-642-10794-8_4

Ordering information: This item can be ordered from
http://www.springer.com/9783642107948

DOI: 10.1007/978-3-642-10794-8_4

Access Statistics for this chapter

More chapters in Developments in Health Economics and Public Policy from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().