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Solidarity in competitive health insurance markets: analysing the relevant EC legal framework


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  • Paolucci, Francesco
  • Exter, Andre Den
  • De Ven, Wynand Van


In this article we perform an economic analysis of different regulatory frameworks that aim at guaranteeing solidarity in competitive health insurance markets. Thereafter, we analyse the legal conformity of these intervention strategies with EC law. We find that risk compensation schemes are the first-best intervention strategy because they guarantee an acceptable level of solidarity without hindering free trade and competition and without reducing efficiency. Second-best options are premium and excess-loss compensation schemes, which guarantee solidarity at the expense of some efficiency. Premium rate restrictions and open enrolment should be avoided because they reduce efficiency and are unnecessary, not proportional, and undesirable to the pursuit of the general good. These conclusions are relevant for EU countries that adopt premium rate restrictions and open enrolment in combination with a risk compensation scheme, such as Ireland and the Netherlands. In these countries policy makers should design the health insurance schemes in conformity with EC law, for example by replacing premium rate restrictions and open enrolment with premium and or excess-loss compensation schemes.

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Bibliographic Info

Article provided by Cambridge University Press in its journal Health Economics, Policy and Law.

Volume (Year): 1 (2006)
Issue (Month): 02 (April)
Pages: 107-126

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Handle: RePEc:cup:hecopl:v:1:y:2006:i:02:p:107-126_00

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Cited by:
  1. Stefan Greß & Maral Manouguian & Jürgen Wasem, 2007. "Health Insurance Reform in the Netherlands," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 5(1), pages 63-67, 05.
  2. Francesco Paolucci & Femmeke Prinsze & Pieter Stam & Wynand Ven, 2009. "The potential premium range of risk-rating in competitive markets for supplementary health insurance," International Journal of Health Care Finance and Economics, Springer, vol. 9(3), pages 243-258, September.
  3. Carlos Octávio Ocké-Reis, 2005. "A Reforma Institucional do Mercado de Planos de Saúde: Uma Proposta para Criação de Benchmarks," Discussion Papers 1075, Instituto de Pesquisa Econômica Aplicada - IPEA.
  4. Anne-Fleur Roos & Frederik Schut, 2012. "Spillover effects of supplementary on basic health insurance: evidence from the Netherlands," The European Journal of Health Economics, Springer, vol. 13(1), pages 51-62, February.
  5. Frederik T. Schut & Wynand P. M. M. Van de Ven, 2005. "Rationing and competition in the Dutch health-care system," Health Economics, John Wiley & Sons, Ltd., vol. 14(S1), pages S59-S74.


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