A December 2008 manuscript examines changes in the health insurance system in the Netherlands after implementation of the Health Insurance Act of 2005. The study captures two years of experience through the perspectives of patients, insurers, providers, government, and other stakeholders. Prior to the reforms, the Dutch system was a hodgepodge of public and private insurance plans. Persons earning greater than 32,600 Euros annually (in 2004) paid for their own voluntary, private insurance. Individuals below this threshold had compulsory and automatic insurance funded by general taxation (24 percent), employer sponsored contributions (66%), and individual community rated premiums (10%). Civil servants and government employers had their own, separate insurance fund.
Under the new Health Insurance Act, an individual mandate applied to all citizens and residents required to pay Dutch payroll taxes. Health insurers (largely for-profit companies) were required to enroll all who applied (guaranteed issue), charge community rated premiums, and cover a basic benefits package that included ambulatory care, hospitalization, some dental care, pharmaceuticals, maternity care, ambulance services, and some rehabilitation services. Health insurers could still freely market supplementary health insurance policies above-and-beyond the basic benefits package.
The new funding system consists of personal premiums (average 1,106 Euros per year) and 6.5% payroll tax (capped at 2,000 Euros). A sliding-scale income-based subsidy helps individuals whose premiums represent greater than 5 percent of their annual income. The new Dutch system reflects the best experiment of Alain Enthoven’s theory of managed-competition in health care.
Early results show that health care costs continue to rise even while insurance companies have shown corporate losses. Public opinion polls demonstrate that voters are less fond of the new system compared to the old (18 percent prefer the new system while 41 percent prefer the old system). Lastly, consumers are not necessarily choosing plans based on price differentials. Among those who switched plans, 39 percent cite the ability to purchase a specific supplement package and 33 percent cite customer service issues, while only 28 percent cite cost of the basic plan.
Except for the costs (about half of the United States) and the less than 2 percent uninsured rate, the old Dutch system possessed similarities to the American health care system where government currently funds 45 percent of health care, private insurance covers 36%, and out-of-pocket/personal expenses account for 19%. While the American system is far more rooted in government involvement in health care, a move to a more privatized system (with important regulations a key component) is welcomed by some. On initial glance, Enthoven’s theory for managed-competition including an individual mandate, guaranteed issue, community rating, and a goal of universal health care fails to control costs and is wildly unpopular in the Netherlands. A major difference between the Dutch system and either President Obama’s or Senator Baucus’ visions for health reform is focus on a robust public insurance system.
Cedric K. Dark, MD, MPH