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New health insurance system

Partner Institute: 
Institute of Health Policy & Management, Erasmus University Rotterdam
Survey no: 
Jos Holland and Andr den Exter, department of Health Policy and Management
Health Policy Issues: 
Role Private Sector, System Organisation/ Integration, Political Context, Funding / Pooling, Access
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? yes yes yes yes no no no
Featured in half-yearly report: Health Policy Developments Issue 4


Introduction of a new social health insurance law for curative care. Objectives: less central regulation and introduce regulated competition. Under the new Law, all residents are obliged to take out health insurance. Under the current situation, only those people with incomes below the maximum wage level are compulsory insured.

Purpose of health policy or idea

  • To introduce a new social health insurance law for curative care
  • Less central regulation and to introduce regulated competition
  • Under the new Law, all residents are obliged to take out health insurance. Under the current situation, only those people with incomes below the maximum wage level are compulsory insured
  • The insured package provides essential curative care tested against the criteria of demonstrable efficacy, cost effectiveness and the need for collective financing. The insured package follows on from the cover provided under the current Social Health Insurance Act (Zfw). The insured's entitlements will be described in a function-oriented way, i.e. health insurers will be given an instrument to organise healthcare efficiently. Furthermore, certain mental care elements will be transferred from the exceptional medical expenses scheme towards in the new standard package.
  • The health insurance system will be operated by private (non-profit and for-profit) health insurance entities). Companies can make profits on the operation of health insurance policies and they can pay dividends to the shareholders
  • In choosing a health insurer, residents will be informed by insurance policies. In addition, there are a number of 'choice elements' legally enshrined, such as the personal excess.
  • Health insurance companies are obliged to accept everyone resident in their area of activity. This applies for all the insurance models (benefit/reimbursement/mixed model) in their range.
  • A system of risk equalisation makes the acceptance obligation possible and will prevent direct or indirect risk selection.
  • Care providers will compete with each other on the basis of price and quality. Account will have to be taken of a transitional period towards more regulated market operation. The existence and extent of the contracting obligations (for hospitals) during this transitional period will differ by submarket.
  • The insured pays a nominal premium to the health insurer. This premium can differ by insurer, but each insurer will have the same premium for each policy type. Every one with the same policy will pay the same insurance premium.
  • A streamlining of the supervisory structure to avoid duplication of supervision and an accumulation of supervisory bodies.

Main points

Main objectives

To improve cost efficiency by decentralising and privatising the operation of health care services and strengthening cost containment

Type of incentives

financial and non-financial

Groups affected

The insured, health insurers, health providers

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Characteristics of this policy

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

Political and economic background

  • Historically, the Dutch health insurance system has been characterised by a variety of insurance schemes. By introducing a new basic health insurance scheme for all residents, the government aims to improve the scheme's efficiency and the quality of health care.
  • The new health insurance system is part of major health care system reforms including changes in health care tariff regulation and health care planning.
  • The new health insurance system anticipates to new developments in the health insurance sector (convergence between compulsory and privately insured, merges between insurance entities, etc.). Furthermore, the new scheme includes some major elements from previous reform proposals (e.g., Dekker reform 1987).
  • The new Health Insurance Act includes main elements derived from EU regulations on the coordination of social security systems but is also based on ILO social security conventions.
  • Case law from the European Court of Justice also required modification of the current legal system, particularly with respect to cross-border care (e.g., the Müller-Faure/Van Riet case, under which the insured has an option of receiving extramural care in another EU member state from a non-contracted or non-employed provider)
  • The new health insurance system is part of a more general revision of the overall health care system, including planning and tariff reforms, aimed at improving efficiency and cost containment.

Purpose and process analysis

Current Process Stages

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

Origins of health policy idea

  • The new health insurance system is based on a previous government proposal, initiated by the government (Balkenende I, 2002). After re-elections, Balkenende II further developed the proposal for a basic health insurance scheme for the entire population.
  • The main purpose was to guarantee a sustainable, affordable and accessible health insurance system for all residents. To realise this objective, the emphasis is on a basic health insurance scheme operated by private (for-profit) insurance companies, whereas the government defines primary public conditions which the actors should fulfil. The new Health Insurance Act (Zvw) defines the necessary conditions which relevant actors have to comply and the entitlements of the insured.
  • The MoH is the driving force of this operation, informed Parliament about the draft Law and consulted various advisory councils and institutions, providers and consumer organisations etc.
  • The idea is based on the pervious Dekker reform to introduce a basic health insurance scheme for the entire population. Nonetheless, a major difference includes the role of private insurance companies.
  • The Zvw is inspired by the Swiss social Health Insurance Act based on the concept of competitive health insurance in order to contain costs.
  • Other main actors are the insurance companies and their umbrella organisation ZN
  • Elements from the new Health Insurance Act will already by implemented prior to its enactment, e.g., the introduction of a no-claim refund arrangement, selective contracting institutional providers.

Initiators of idea/main actors

  • Government
  • Parliament
  • Providers
  • Payers
  • Patients, Consumers
  • Civil Society
  • Scientific Community
  • Private Sector or Industry
  • Media

Stakeholder positions

  • ZN, the umbrella organisation of health insurers supports the idea of a basic health insurance scheme since it increases the role of insurers in cost-containment issues.
  • The national patient organisation (NPCP) also supports the proposal since it enhances the patient's choice of insurer and provider.
  • The largest left wing party in Parliament (Social Democrats) question main elements from the new Law but do not principally reject the proposal. The Socialists (SP) strongly reject the private law-based organisation of health insurance, instead they favour an improvement of the current system while emphasizing the government responsibilities.
  • The draft Law has been sent to Parliament for approval. Prior to this it was send to the Council of State for legal review which highly criticized the original draft.
  • The Ministry of Health (partly) incorporated these comments and suggestions in a revised draft Law.
  • So far, the process of Parliamentary debate as just started and has organised itself several hearings on the new Health Insurance Law by inviting several (legal) specialists. In the meantime, the Minister of Health has also asked for additional advice from academics whether the suggested system is 'Europe' proof.

Actors and positions

Description of actors and their positions
Minister of Health, Welfare and Sportsvery supportivevery supportive strongly opposed
House of Representativesvery supportiveneutral strongly opposed
Senatevery supportiveneutral strongly opposed
Health providersvery supportiveneutral strongly opposed
Health Insurance companiesvery supportivesupportive strongly opposed
Patients, Consumers
Patientsvery supportiveneutral strongly opposed
Civil Society
Civil Societyvery supportiveneutral strongly opposed
Scientific Community
Scientistsvery supportiveneutral strongly opposed
Private Sector or Industry
Private health insurance companiesvery supportivevery supportive strongly opposed
Mediavery supportiveneutral strongly opposed

Influences in policy making and legislation

  • The new health insurance system was introduced by the draft Law on Health Insurance ('Zorgverzekeringswet', Zvw), which was sent to the House of Representatives mid 2004.
  • At this moment, Parliamentary debate has only started recently.
  • So far, based on the comments and recommendations made by the Council of State, the government has included some technical changes to the text.
  • A major issue of the debate focuses on the Law's conformity to EC law. The question is whether the operation by private insurance companies is in line with Community law. For this reason, the MoH asked the European Commission for legal advice, which answer was in principle positive. Nonetheless, the Commission made some critical comments that initiated further research by the Ministry. This might result in some further changes of the draft Law.
  • Apart from the European Commission, opponents to the draft Law have suggested to start a judicial procedure at the European Court of Justice in order to assess the Law's conformity and ask for a final judgement. It is not unlikely that the Court may conclude that the Law contravenes Community law. If that would be the case, the Minister of Health already suggested to modify the system in such a manner that the health insurance scheme will be carried out by not for profit insurance entities only.
  • Also academic lawyers have been rather critical about the draft Law and its relation to international law, due to several trade restrictive measures.

Actors and influence

Description of actors and their influence

Minister of Health, Welfare and Sportsvery strongvery strong none
House of Representativesvery strongvery strong none
Senatevery strongstrong none
Health providersvery strongweak none
Health Insurance companiesvery strongstrong none
Patients, Consumers
Patientsvery strongweak none
Civil Society
Civil Societyvery strongweak none
Scientific Community
Scientistsvery strongneutral none
Private Sector or Industry
Private health insurance companiesvery strongstrong none
Mediavery strongweak none
Private health insurance companiesMinister of Health, Welfare and SportsHealth Insurance companiesHealth providers, Patients, Civil Society, MediaScientistsSenateHouse of Representatives

Positions and Influences at a glance

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

Adoption and implementation

  • Health insurers will have to implement the new Health Insurance Law.
  • A necessary condition for effective competition is a certain oversupply of health facilities. So far, advisory bodies have concluded that the scarcity of hospital capacity might endanger effective competition among health providers (hospitals). To compensate shortages of capacity, the MoH has already suggested to allow private for profit hospitals on the market.
  • Choice of insurers requires transparency with respect to the various insurance policies and the related conditions. The government will pursue certain supplementary policies to this end. For instance, the use of 'report cards' should make it easier to compare health insurance companies with each other. Also, the supervision on the information provided by insurers will remain a government task (see hereafter).
  • Adequate supervision. The not yet established Health care Authority ("Zorgautoriteit") into which the existing Supervisory Board for Health Care Insurance (CTZ) will be incorporated, will play a pivotal role in this respect. The various supervision areas and responsible organisations will be as follows: prudential supervision of the health insurers' financial position; sector-specific market supervision, including the promotion of the health insurance market; supervision of the operation of the Health Insurance Act (statutory obligations); and, finally, supervision of health care-specific behaviour such as informing citizens about health insurance policies.
  • Streamlining supervision structures. In order to prevent overlap, the MoH is restructuring the supervision bodies and their competences in health care, including health insurance..
  • Intersectoral exchange of information. Health insurers will apply an electronic infrastructure. This requires the exchange of information between various sectors. The Board on Health Insurance (CVZ) will manage and supervise this data base.

Monitoring and evaluation

  • The new Health Insurance Act foresees in a periodic review of the effectiveness and its consequences to daily practice of the Law after five years of enactment. So far, further details are not available.
  • Prior consultations of various actors in the health care sector may contribute to create a 'level playing field'.

Expected outcome

  • The new health insurance law will remove the distinction between compulsory and privately insured. Therefore, remove the distinction in policies and entitlements.
  • Less government intervention and increase the role of the private sector. It can be argued that decentralising and privatizing the health sector means a reduction of government intervention. On the contrary, market imperfections and perverse incentives (the introduction of DCB's) impose more strict regulation and public intervention in order to guarantee access to public services.
  • Lack of countervailing power. The main objectives are efficiency improvement and cost containment. Since competition on both the insurance and providers side can be questioned, one may have doubts about the realization of both objectives. Scarcity of hospital facilities will hinder effective competition among providers, merges between insurance funds will minimize competition and insurance funds may opt out from operating nationwide and choose a smaller area of activity. At this moment, health insurance funds are already discussing this option, which may further reduce competition among insurers.
  • A further major concern is whether the public conditions under which private insurance companies should function are adequate to guarantee equal access for all, particularly since the latent possibility of risk selection, the variety in health policies and substantial own risk contributions.
  • Establishing a 'Europe proof' health care system. This is highly questionable; although the European Commission has accepted the interpretation from the MoH, there is no certainty whether the European Court of Justice will accept a social health insurance scheme, organized on a private for profit basis. Of not, the MoH has to reorganized the system in a more public law setting.

Impact of this policy

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


Sources of Information

Ministry of Health web page ( also in English

The Dutch Insurers union (ZN). (relevant articles only in Dutch)

Policy papers of the House of representatives of Parliament (all in Dutch)

Council of State (Raad van State) in Dutch

Health Insurance Board (College voor Zorgverzekeringen, CVZ), in Dutch

Search site references: Zorgverzekeringswet, stelselherziening, gezondheidszorgwetgeving.

Author/s and/or contributors to this survey

Jos Holland and Andr den Exter, department of Health Policy and Management

Suggested citation for this online article

Jos Holland and Andr den Exter, department of Health Policy and Management. "New health insurance system". Health Policy Monitor, November 2004. Available at