Abstract

If public resources were unlimited, there would be no gaps in health coverage and no real need for voluntary health insurance (VHI). Most health systems face fiscal constraints, however, and VHI is often seen as a way to address these pressures. This study draws from the experiences of 34 countries to assess VHI’s contribution to health spending and to understand its role in Europe and in relation to publicly financed coverage. It looks at who sells VHI, who purchases it and why. It also reviews public policy on VHI at the national and European Union (EU) levels and the related national policy debates.

The analysis shows that, while the markets for VHI vary considerably in size, operation and regulation, the vast majority are small. The substantial markets tend to be the oldest, to have a tradition of non-profit insurers and to be the most heavily regulated to ensure VHI policies are accessible and affordable. The study also suggests that VHI is normally a better way of meeting the population’s health needs than out-of-pocket payments, although there are notable exceptions. VHI can contribute to financial protection, especially where it plays a substitutive and complementary role covering co-payments. Nevertheless, it is a complex, challenging and highly context-specific policy instrument that may undermine other health-system goals, including equitable access, efficiency, transparency and accountability, even where markets are well regulated. Policy-makers should therefore exercise real caution before expanding VHI to fill coverage gaps.

This report is accompanied by a set of country profiles. The study draws on contributions from national experts from the countries in the EU and the European Free Trade Association, and other countries in the WHO European Region.

Contents

• Acknowledgements
• List of abbreviations
• Note
• 1. Introduction
• 2. VHI at a glance
  • VHI’s contribution to total spending on health
  • VHI’s contribution to private spending on health
  • Why do people buy VHI?
  • What role does VHI play?
  • How many people buy VHI?
  • Who buys VHI?
  • What is the socioeconomic status of people with VHI?
  • Who sells VHI?
  • Who can buy VHI and on what terms?
  • How do insurers set VHI premiums?
  • How do insurers purchase health services?
  • How do insurers spend their revenue?
  • Who regulates VHI markets?
  • How is VHI regulated?
  • Tax incentives for VHI
  • National policy developments and concerns around VHI
• 3. Why do people buy VHI?
  • 3.1. What drives the demand for VHI?
  • 3.2. VHI plays different roles
• 4. Who buys VHI?
  • 4.1. Share of the population covered by VHI
  • 4.2. Individuals versus groups
  • 4.3. The socioeconomic status of VHI policyholders
• 5. How do markets for VHI work?
  • 5.1. Type and number of entities selling VHI
  • 5.2. Policy conditions, premiums and benefits
  • 5.3. Consumer choice and information
  • 5.4. Purchasing health services
  • 5.5. VHI spending on health services and administration
• 6. Public policy towards VHI
  • 6.1. EU regulation
  • 6.2. National regulation
  • 6.3. Tax policy
  • 6.4. National policy developments and concerns
• References
• Appendix A. Data on health spending in the European Region
• Appendix B. Information on the availability of data and on data assumptions made for figures based on WHO
• Appendix C. Country codes

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The European Observatory on Health Systems and Policies supports and promotes evidence-based health policy-making through comprehensive and rigorous analysis of health systems in Europe. It brings together a wide range of policy-makers, academics and practitioners to analyse trends in health reform, drawing on experience from across Europe to illuminate policy issues.

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