VHI cover can be offered as a short-term (non-life) basis, or on a long-term (life) basis in which premiums are used to finance both current year costs and to build reserves for increasing age. Short-term (usually annual) contracts are the norm for VHI in the European Union, and most insurers set a maximum age limit for purchasing VHI, usually between 60 and 75 (see Table 12). Some insurers also cancel contracts when people reach retiring age. Lifetime cover is required by law in Ireland, where it applies to all policies. It is also available for hospital cost in-surance policies in Austria, for some policies in Greece and Sweden and for the most expensive policies in Portugal. Substitutive VHI in Germany is written on a lifetime basis.
Exclusions
Open enrolment entitles everyone in a given population to insurance cover and prohibits insurers from rejecting applications. The Irish government requires all voluntary health insurers in Ireland to offer open enrolment, and mutual asso-ciations in Luxembourg offer open enrolment, but it is otherwise rare in the Eu-ropean Union (Department of Health and Children, 1999).
Insurers in Austria cannot refuse to insure someone with a chronic illness, but they are permitted to charge higher premiums or introduce some form of cost-sharing (see Table 13) (Hofmarcher, 2001). French insurers are also usu-ally prohibited from excluding particular conditions, although they may do so if the insurer can prove that the subscriber suffered from the condition before purchasing the policy (Sandier, Ulmann, 2001).
In all other member states, VHI policies are generally subject to exclusions (see Table 13). Complementary and supplementary VHI policies usually ex-clude pre-existing conditions, although some insurers will cover them for an increased premium. The list of exclusions can be very long. In the United King-dom, for example, VHI policies do not usually cover pre-existing conditions, general practitioner services, accident and emergency admission, long-term chronic illnesses such as diabetes, multiple sclerosis and asthma, drug abuse, self-inflicted injuries, outpatient drugs and dressings, HIV/AIDS, infertility, normal pregnancy and child birth, cosmetic surgery, gender reassignment, pre-ventive treatment, kidney dialysis, mobility aids, experimental treatment and drugs, organ transplants, war risks and injuries arising from hazardous pursuits (Association of British Insurers, 2001a).
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Table 12. Age limits and types of contract, 2001
Country Age limits Type of contract
Austria No Per diem hospital cost policies:
annual contracts
Hospital cost insurance: life-time cover
Belgium 65
Denmark 60 Annual or long-term contracts
Finland 60–65
Germany No (substitutive VHI) Lifetime cover (substitutive VHI)
Greece Insurers can set age limits Annual contracts and lifetime cover available ( lifetime cover more popular); insurers can re-ject applications
Ireland Open to people older thanh 65 since 2001
Lifetime cover
Italy Commercial individual:
people older than 75 usually not eligible Commercial group: access restricted to employees and (sometimes) dependants Mutual group: no age limits; retired peo-ple can continue to be covered if they have been covered for 5 to 10 years Mutual individual: 65–75
Mostly annual contracts
Luxembourg Commercial: 60 Annual contracts; insurers can-not cancel contracts
Netherlands Age limits may apply Annual contracts; insurers can-not cancel contracts on the ba-sis of claims experience Portugal 65 (70 if covered between 55 and 64
years old)
Annual contracts; not always clear whether insurers can can-cel contracts or not; the most expensive policies offer life-time cover
Spain 60–75 (but the two largest insurers do not set an age limit)
Annual contracts
Sweden 65–70 Annual contracts; some
insur-ers offer lifetime cover if pur-chased before 65
United Kingdom
No age limits but only 5% of the older than-65 population is covered (against an average of 9% for all age groups)
Mostly annual contracts
Sources: National reports prepared for this study.
Section 2 The market for VHI in the European Union
Table 13. Conditions usually excluded from VHI cover, 2001
Country Usual exclusions
Austria Individual: pre-existing conditions usually excluded (but not from group policies);
insurers cannot refuse to insure someone with a chronic illness but may charge higher premiums and/or introduce cost-sharing arrangements
Belgium Mutual: psychiatric and long-term care (lump sum) Mutual: psychiatric care (co-payment)
Commercial: pre-existing conditions, infertility treatment, accidents arising from sports
Denmark Pre-existing conditions
Finland Pregnancy and childbirth, infertility treatment, alcoholism, herbal remedies, treat-ment covered by statutory health insurance
France Excluding any disease is forbidden by law, although it can be authorized in individ-ual policies under certain conditions: the disease has to be clearly stated and the in-surer has to prove that the patient had the disease before purchasing the policy Germany Pre-existing conditions are excluded if they were known at the time of
underwrit-ing and were not disclosed by the insured; declared pre-existunderwrit-ing conditions are covered but generally result in higher premiums
Greece Pre-existing conditions Ireland Open enrolment
Italy Individual: pre-existing conditions, chronic or recurrent diseases, mental illness, al-cohol and drug addiction, cosmetic surgery, war risks, injuries arising from insur-rection, natural disasters etc.; also often dental care not caused by accident/illness Group: pre-existing conditions such as diabetes, drug and alcohol addiction, HIV/
AIDS, severe mental health problems such as schizophrenia, voluntary termination of pregnancy and war risks
Luxembourg Mutual: open enrolment (but no cover for treatments excluded from statutory health insurance)
Commercial: pre-existing conditions
Netherlands Some dental plans may require people to have their teeth restored before accept-ance
Portugal Individual: pre-existing conditions, long-term chronic illnesses (such as diabetes, multiple sclerosis and asthma), HIV/AIDS, haemodialysis, self-inflicted injuries, psy-chiatric treatments, check-ups, dental care, outpatient drugs, alternative medicine and non-evidence based treatment; dental care, delivery costs and outpatient drugs are only covered by the most expensive policies
Spain HIV/AIDS, alcoholism and drug addiction, dental care (often available for a supple-mentary premium), prostheses, infertility treatments, orthopaedics etc.; some insurers do not have general restrictions but may reject certain conditions; most insurers of-fer extra benefits for a supplementary premium e.g. organ transplants, second opin-ions, family planning, assistance during trips, treatment abroad, certain prostheses;
only one insurer, in one policy, offers homeopathy or spa treatment
Sweden Emergency care, long-term care, HIV/AIDS, some other communicable diseases, diseases and injuries as result of the use of alcohol or other intoxicating substances, prenatal care, childbirth (normal or with complications), termination of pregnancy, infertility treatment, vaccinations
United Kingdom
Pre-existing conditions, general practitioner services, accident and emergency ad-missions, long-term chronic illnesses such as diabetes, multiple sclerosis and asthma, drug abuse, self-inflicted injuries, outpatient drugs and dressings, HIV/AIDS, infer-tility, normal pregnancy and childbirth, cosmetic surgery, gender reassignment, pre-ventive treatment, kidney dialysis, mobility aids, experimental treatments and drugs, organ transplants, war risks and injuries arising from hazardous pursuits
Sources: National reports prepared for this study.
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