Sarah Thomson
4.4 Voluntary health insur ance
VHI can protect people from user charges and other out- of- pocket spend ing on health services, espe cially where it covers the cost of user charges for publicly financed treat ment. In prac tice, however, VHI’s protect ive effect is limited (in Europe and else where) for the follow ing reasons. First, VHI cover ing user charges is the excep tion rather than the norm; as Figure 4.3 shows, VHI gener ally plays a supple ment ary role, provid ing people with faster access to treat ment and greater choice of provider. Second, take- up of VHI is gener ally low (Figure 4.3) and in 2011 VHI’s share of total spend ing on health only exceeded 5 per cent in 11 European coun tries (Figure 4.4). Third, VHI tends to be bought by richer and health ier people, so its protect ive effect may not be felt by those whom it would benefit most (Thomson and Mossialos 2009).
Note: Countries high lighted in bold intro duced new user charges. * denotes a reversal of a recently intro duced policy.
Table 4.5 Reported changes to user charges policy, 2008–13 (Continued)
One indic ator of the protect ive effect of VHI is the share of private spend ing on health that is pre- paid through VHI as opposed to out- of- pocket.
Figure 4.5 shows how limited the protect ive effect ive effect is in most coun tries. In 2007 and 2012 there were only six European Region coun tries in which VHI accoun ted for over a third of private spend ing on health. Its share of private spending also tended to be lower in coun tries with high levels of out- of- pocket payments.
In an economic crisis, when house hold incomes are falling, VHI is only likely to play a greater role under the follow ing circum stances:
•
there are dramatic reduc tions in publicly financed health cover age mainly affect ing richer people•
the VHI market is well- estab lished or highly respons ive•
waiting times increase signi fic antly•
VHI is promoted by govern ment through gener ous tax subsidies.It would not be advis able for govern ments to use tax subsidies to promote VHI at a time of severe fiscal constraint. Research shows that the cost savings achieved through tax subsidies for VHI (for example, lower public spend ing on Figure 4.3 Share (%) of the popu la tion covered by VHI, latest avail able year, selec ted European coun tries
Source: Sagan and Thomson (2015 forthcoming).
Note: Substitutive = VHI for people not covered by the publicly financed system;
Supplementary = VHI provid ing people with faster access and more provider choice;
Complementary (S) = VHI cover ing services excluded from the publicly financed bene fits package; Complementary UC = VHI cover ing user charges. Where data by market role were not avail able, the domin ant market role was chosen. Data for 2007 (Switzerland), 2008 (Latvia), 2009 (Cyprus, Russian Federation), 2010 (Bulgaria, Denmark supple ment ary VHI, France, Germany, Malta, Poland, Portugal, Slovenia), 2011 (Austria, Denmark complementary (UC) VHI, Georgia, Greece, Norway, Slovakia, Sweden), 2012 (Croatia, Finland, Ireland, the Netherlands), unknown year (Italy, Ukraine).
92 Economic Crisis, Health Systems and Health in Europe
Figure 4.4 Voluntary health insur ance as a share (%) of total spend ing on health, 2007 and 2012, European Region
Source: WHO (2014).
Note: Countries ranked from highest to lowest growth between 2007 and 2012. Values were equal to zero in Iceland and Slovakia and < 0.05% in both years for Belarus, Bosnia and Herzegovina, Bulgaria, the Czech Republic, Estonia, Kazakhstan, Republic of Moldova, Romania, Sweden, Tajikistan. No data were avail able for Albania.
Figure 4.5 Voluntary health insur ance as a share (%) of private spend ing on health, 2007 and 2012, European Region
Source: WHO (2014).
Note: Countries ranked from lowest to highest growth between 2007 and 2012. Values < 0.05% in both years in Kazakhstan, Republic of Moldova, Tajikistan. No data were avail able for Albania, Iceland, Italy, Kyrgyzstan, the former Yugoslav Republic of Macedonia, Montenegro, Norway, Slovakia, Turkmenistan.
94 Economic Crisis, Health Systems and Health in Europe
health) are usually less than the amount spent on the subsidies them selves (Chai Cheng 2014), and that tax subsidies can encour age tax avoid ance (Stavrunova and Yerokhin 2014). Consequently, intro du cing or increas ing tax subsidies for VHI might exacer bate fiscal pres sure within the health sector and for the govern ment as a whole.
Between 2007 and 2012, VHI’s share of total spend ing on health grew in 23 out of the 34 coun tries for which data are avail able (Figure 4.4). Its share of private spend ing on health grew in 30 out of 41 coun tries (Figure 4.5). However, the rate of growth was gener ally slower post- crisis than it had been between 2002 and 2007, which suggests the crisis may have had a dampen ing effect.11 It is not possible to tell, from these data, whether changes in the VHI share of private spend ing were driven by falling levels of out- of- pocket payment due to pres sure on house hold budgets, VHI premium increases or greater up take of VHI and, in the latter case, whether this take- up was concen trated among richer people. In Ireland, however, the VHI share of total health spend ing rose dramat ic ally between 2007 and 2012 (from just under 8 per cent to over 13 per cent), a period in which VHI take- up actu ally declined as house holds faced finan cial pres sure. The change there fore reflec ted Ireland’s large decline in public spend ing on health.
Italy, Lithuania, the former Yugoslav Republic of Macedonia, Montenegro, Poland and Turkey repor ted efforts to promote comple ment ary VHI in 2012 through legis lat ive propos als or changes to enable VHI to cover excluded services. The Lithuanian initi at ive is repor ted to have failed due to negat ive public opinion, and the Polish option was not imple men ted. In 2009, France exten ded tax subsidies for VHI cover ing user charges to make it more access-ible to poorer people.12 However, in EU coun tries the pre- crisis trend of abol ish-ing or redu cish-ing non- targeted tax subsidies for VHI (Thomson and Mossialos 2009) has contin ued. Denmark repor ted abol ish ing tax subsidies for corpor ate purchase of VHI in 2011, while in the same year Portugal abol ished tax subsidies for private spend ing on health for people in the top two income brack ets and reduced them from 30 per cent to 10 per cent of total personal private expendit ure for every one else.
It is too early to tell what effect, if any, these more recent changes have had on levels of VHI spend ing. In France, the rate of VHI spend ing growth (VHI as a share of total health spend ing) was faster after 2007, possibly reflect ing greater take- up. As chapter two showed, most of the increases in private spend-ing that occurred follow spend-ing the onset of the crisis were due to growth in out- of- pocket payments.
4.5 Policy impact and implic a tions for health system perform ance