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Mandatory deductible in basic health insurance

Country: 
Netherlands
Partner Institute: 
University of Maastricht, Department of Health Organization, Policy and Economics (BEOZ)
Survey no: 
(11)2008
Author(s): 
Maarse, Hans
Health Policy Issues: 
Funding / Pooling
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes no no

Abstract

A key element of the new basic health insurance (2006) was the introduction of a no-claim arrangement (NCA). After two years of experience the arrangement has been abolished. It proved to be an ineffective and administratively highly complex instrument. Furthermore it was considered an unfair arrangement. Since 2008 it has been replaced with a mandatory deductible (MD) of 150 euro (103 euro for persons with chronic illnesses) for insured aged 18 years or older.

Purpose of health policy or idea

The main purpose of the mandatory deductible is to increase individual responsibility of consumers/patients in health care and increase efficiency by avoiding unnecessary medical consumption. Another purpose of the instrument is to bring about a shift from public to private financing in health care. Furthermore, the mandatory deductible is intended to resolve the perceiced unfairness of the no-claim arrangement (see HPM report "The no-claim arrangement in health insurance").

Main points

Main objectives

The mandatory deductible applies to all insured aged 18 or older. It is set at 150 euro, except for persons who are registered as chronically ill - for them it is set at 103 euro. The latter amount is based on the expectation that the average deductible will be 103 euro per person. All insured can opt for a higher voluntary deductible up to 500 euro in exchange for a lower premium rate. The costs of GP care, maternity care and assistance at a delivery are excluded from the mandatory deductible (these costs are fully covered by the new health insurance scheme).

Type of incentives

The mandatory deductible can be classified as a financial instrument.

Groups affected

patients (patients aged 18 and older must copay 150 euro a year for all care covered by the new health insurance scheme; the costs of GP care, maternity care and assistance at delivery excluded), insurers (must implement the arrangement.), providers

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Characteristics of this policy

Degree of Innovation traditional rather traditional innovative
Degree of Controversy consensual controversial highly controversial
Structural or Systemic Impact marginal neutral fundamental
Public Visibility very low high very high
Transferability strongly system-dependent rather system-neutral system-neutral

Political and economic background

The main reason of the mandatory deductible was the failure of the no-claim arrangement. The NCA was problematic for at least three reasons:

  1. It was a highly complex arrangement from an administrative point of view.
  2. It was considered an ineffective instrument. It did not reduce medical consumption because of the time lag between medical consumption and experiencing the financial consequences of that consumption (the 255 euro for the NCA was paid back one year later, after the costs of medical care in the previous year had been subtracted) 
  3. It was considered unfair because persons who needed frequent medical care could not benefit from the arrangement. 

The mandatory deductible is assumed to resolve the second and the third problem. Because of the direct link between utilisation of medical care and financial consequences, the MD is assumed to be more effective than the NCA. The MD is also viewed as a solution to the unfairness of the NCA because the rate for individuals with chronic conditions is set 47 euro lower than the standard MD of 150 euro.

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes no no

Origins of health policy idea

The idea was developed by the Ministry of Health. It is a good example of 'reforming the reform'. Interestingly, the no-claim arrangement was introduced in 2006 (in 2005 already for subscribers of the sickness funds), because at that time there was no political majority for a mandatory deductible. The no-claim arrangement was a political compromise. Now that it has proven to be ineffective and unfair, a mandatory deductible has become politically acceptable.

The mandatory deductible is not new in Dutch health insurance. An earlier version of it was introduced in 1997 but cancelled after two years because of administrative complexity, lack of effectiveness and social/political resistance. To increase the effectiveness of the mandatory deductible now, there are plans to set up the current version differently. According to these plans insurers will be allowed to cancel the mandatory deductible if the patient visits a preferred provider. So the mandatory deductible is converted into a financial instrument to steer patients. This is not yet possible under the current new health insurance legislation, but a proposal to change the legislation has been sent to the Parliament .

Initiators of idea/main actors

  • Government
  • Providers
  • Payers
  • Patients, Consumers
  • Media

Approach of idea

The approach of the idea is described as:
renewed: The MD is not new in Dutch health insurance. An earlier version of it was introduced in 1997 but cancelled after two years because of administrative complexity, lack of effectiveness and social/political resistance.

Stakeholder positions

The introduction of the mandatory deductible was strongly opposed by the Socialist Party. The Labour Party, taking part in the government coalition, supported the arrangement.

Insurers see the mandatory deductible as an instrument to reduce utilisation of medical care and thus costs. Furthermore, one should not forget that all insurers additionally give their subscribers the opportunity to take out a policy with a voluntary deductible, ranging from 100-500 euro (a person who opts for a 100 euro deductible, must pay 150 (mandatory) + 100 (voluntary) = 250 euro out-of-pocket). I believe that the appreciation of the mandatory deductible has significantly changed over the last few years. 

Patients and doctors always protest against these measures because they are considered unfair (they hit the sick) and may reduce access to health care. Doctors also believe that a deductible may interfere in the patient-physician relationship. This is all a cultural aspect of health care in the Netherlands.

Actors and positions

Description of actors and their positions
Government
Ministry of Healthvery supportivevery supportive strongly opposed
Ministry of Financevery supportivevery supportive strongly opposed
Providers
Association of general practitionersvery supportiveopposed strongly opposed
Payers
Health insurersvery supportivesupportive strongly opposed
Patients, Consumers
Patient organizationsvery supportiveopposed strongly opposed
Media
Newspapersvery supportiveneutral strongly opposed

Influences in policy making and legislation

The introduction of the mandatory deductible required a change in the 2006 Health Insurance Law.

Legislative outcome

success

Actors and influence

Description of actors and their influence

Government
Ministry of Healthvery strongstrong none
Ministry of Financevery strongstrong none
Providers
Association of general practitionersvery strongweak none
Payers
Health insurersvery strongstrong none
Patients, Consumers
Patient organizationsvery strongweak none
Media
Newspapersvery strongweak none
Ministry of Health, Ministry of FinanceHealth insurersNewspapersAssociation of general practitioners, Patient organizations

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Adoption and implementation

Health insurers, patients and providers are involved in the implementation process. To appease opponents, it was decided again that the costs of GP care, maternity care and assistance at delivery were excluded. It is still not accepted in the Netherlands that patients co-pay for a visit to a GP.

Monitoring and evaluation

No evaluation planned as yet.

Review mechanisms

Mid-term review or evaluation

Dimensions of evaluation

Outcome

Results of evaluation

The NCA has been reviewed and did not prove to be effective.

Expected outcome

The mandatory deductible will only lead to a short-term decline of medical consumption. It will have no long-term effect on it. The only long-term effect will be that the private fraction in health care financing/spending will increase (which is very much appreciated by the Ministry of Finance). I also expect that the MD will be set at a higher level every year. The current level of the mandatory deductible will turn out to be what political scientists call a 'camel's nose'.

Impact of this policy

Quality of Health Care Services marginal neutral fundamental
Level of Equity system less equitable neutral system more equitable
Cost Efficiency very low low very high

References

Author/s and/or contributors to this survey

Maarse, Hans

Suggested citation for this online article

Maarse, Hans. "Mandatory deductible in basic health insurance". Health Policy Monitor, April 2008. Available at http://www.hpm.org/survey/nl/a11/3