CEA

I n su r er s of E urope

Private medical insurance in the European Union January 2011

About the CEA The CEA is the European insurance and reinsurance federation. Through its 33 member bodies the national insurance associations the CEA represents all types of insurance and reinsurance undertakings, eg pan-European companies, monoliners, mutuals and SMEs. The CEA, which is based in Brussels, represents undertakings that account for around 95% of total European premium income. Insurance makes a major contribution to Europes economic growth and development. European insurers generate premium income of over 1 050bn, employ one million people and invest more than 6 800bn in the economy.

Contents
CEA member associations Executive summary I. Introduction II. Benefits of PMI for consumers III. Main types of PMI in the European Union III.1 Voluntary PMI models III.1.1 Additional (complementary and supplementary) PMI III.1.2 Duplicate (alternative) PMI III.1.3 Substitute PMI III.2 Mandatory PMI IV. Common characteristics of PMI IV.1 Legal framework IV.2 Individual and group contracts IV.3 Risk assessment and actuarial calculations IV.4 Premiums IV.5 Data management and protection IV.6 Improvement of health services V. Challenges and recommendations V.1 Challenges V.2 Recommendations 4 5 7 9 10 10 10 10 11 11 13 13 13 13 14 14 15 16 16 16

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CEA member associations

Austria (AT) Versicherungsverband sterreich (VVO) Belgium (BE) Assuralia Bulgaria (BG) Association of Bulgarian Insurers (ABZ) Croatia (HR) Hrvatski ured za osiguranje Cyprus (CY) Insurance Association of Cyprus Czech Republic (CZ) esk asociace pojitoven (AP) Denmark (DK) Forsikring & Pension (F&P) Estonia (EE) Eesti Kindlustusseltside Liit Finland (FI) Finanssialan Keskusliitto France (FR) Fdration Franaise des Socits dAssurances (FFSA) Germany (DE) Gesamtverband der Deutschen Versicherungswirtschaft (GDV) Greece (GR) Hellenic Association of Insurance Companies Hungary (HU) Magyar Biztostk Szvetsge (MABISZ) Iceland (IS) Samtk Fjrmlafyrirtkja (SFF) Ireland (IE) Irish Insurance Federation (IIF) Italy (IT) Associazione Nazionale fra le Imprese Assicuratrici (Ania) Latvia (LV) Latvijas Apdrointju asocicija (LAA) Liechtenstein (LI) Liechtensteinischer Versicherungsverband Lithuania (LT) Lietuvos draudik asociacija Luxembourg (LU) Association des Compagnies dAssurances (ACA) Malta (MT) Malta Insurance Association Netherlands (NL) Verbond van Verzekeraars Norway (NO) Finansnringens Fellesorganisasjon (FNO) Poland (PL) Polska Izba Ubezpiecze (PIU) Portugal (PT) Associao Portuguesa de Seguradores (APS) Romania (RO) Uniunea Naional a Societilor de Asigurare i Reasigurare (Unsar) Slovakia (SK) Slovensk asocicia poistovn Slovenia (SI) Slovensko Zavarovalno Zdruenje (SZZ) Spain (ES) Unin Espaola de Entidades Aseguradoras y Reaseguradoras (Unespa) Sweden (SE) Sveriges Frskringsfrbund Switzerland (CH) Schweizerischer Versicherungsverband (ASA/SVV) Turkey (TR) Trkiye Sigorta ve Reasrans irketleri Birlii United Kingdom (UK) The British Insurers European Committee: Association of British Insurers (ABI) International Underwriting Association of London (IUA) Lloyds

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Executive summary
Significant diversity exists in the private medical insurance (PMI) systems in the European Union (EU), but they can be divided into four categories:

Three are voluntary PMI schemes:

additional (complementary or supplementary) PMI; substitute PMI; and duplicate PMI.

The fourth category is mandatory, of which the only existing scheme in the EU is in the
Netherlands, where it can be sold jointly with supplementary PMI. The diversity of PMI schemes in the EU is the result of economic, historical, cultural and political factors that have led to the development of a variety of PMI models that follow their national public healthcare models. PMI coverage remains low in most EU member states, with the public sector continuing to be the main source of healthcare financing (77.5% in 2006). PMI offers the following benefits:

Consumers receive better access to healthcare and are offered better quality care as well
as a higher level of reimbursement than with public healthcare systems. Compared to public healthcare systems, PMI offers consumers more freedom of choice (eg, when treatment takes place, by which specialist and in which hospital or clinic). Private medical insurers manage risks more efficiently through the pooling of risks.

Despite their diversity, PMI schemes in the EU have numerous common characteristics: PMI is usually taken out on a voluntary basis according to the principles of contractual freedom; the products are tailored to the needs of the policyholder and/or the insured; and private medical insurers offer individual and group contracts. As opposed to the guaranteed access provided by social security systems/national healthcare systems, the premiums paid for PMI depend on what is covered in the contract. This is subject to risk assessment, which takes into account the information contained in the application (when applicable), relevant actuarial and accurate statistical data, and medical knowledge. When collecting and managing the insureds sensitive personal information, private medical insurers are subject to privacy and data protection rules as well as professional medical secrecy requirements. PMI also contributes to improving health services, both by encouraging the insured to make responsible choices and by encouraging healthcare providers to provide high quality and cost effective services. Challenges and recommendations: The significant increases in healthcare costs that are predicted threaten the sustainability of the EUs public healthcare systems. Costs are further expected to rise due to challenges such as ageing populations, medical innovation, the increasing use of new technologies in medicine and the impact of climate change on health.

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Insurers offering PMI can work together with the public sector to ensure that consumers continue to have access to good quality healthcare services that are adapted to their needs. In order to ensure that healthcare in the EU remains sustainable, the insurance sector needs strong political support. The CEAs recommendations therefore include:

Ensuring a level playing field between all stakeholders Introducing and encouraging prevention Promoting health education and information Mitigating the costs of medical innovation Improving the fight against fraud

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I. Introduction
What is private medical insurance? Private medical insurance (PMI) is designed to cover the costs of unexpected health-related events for individuals or groups. Private medical insurers pay benefits to the insured for the medical costs incurred as a result of an illness or an accident that are covered by the insurance policy. These reimbursements are made in exchange for the payment of premiums. By pooling risks, insurers share the risks of individuals among a large group of insured people. This risk-pooling lies at the core of insurance. The larger the number of independent, homogeneous exposures insured, the higher the likelihood that actual losses will be close to expected and budgeted losses. Estimating the probability of an insured event occurring, as well as its expected cost, is crucial for insurers. The regular and continuous collection of among other things statistical, medical and actuarial data, as well as information about the risks submitted (the applicants) is essential for technically sound risk assessment (underwriting). With limited funds, insurers have to determine carefully which risks they can accept and at what price. In a highly competitive market, insurers seek to insure as many people as possible at a fair and affordable price. Voluntary and mandatory PMI PMI can be either voluntary or mandatory, and a clear distinction must be made between the two:

Voluntary PMI is PMI in an EU member state that has no legislation compelling either
individuals or employers to take out PMI. People are free to choose whether or not they want this type of insurance and its coverage.

Mandatory PMI is PMI in an EU member state that has legislation requiring people to
take it out. PMI is, of course, only one of the products sold by private health insurers. Others include critical illness, disability or long-term care insurance. These products are not covered in this booklet because they are structured differently in each EU member state, depending on the features of the national healthcare systems and on national legal frameworks, and because they are subject to specific rules. The challenge of increased healthcare costs As highlighted in the European Commissions White Paper of October 2007, Together for Health: A Strategic Approach for the EU 20082013, the sustainability of the EUs public healthcare systems is under threat from an expected explosion in healthcare costs. This trend is likely to continue due to challenges such as ageing populations, medical innovation, the increasing use of new technologies in medicine and the impact of climate change on health (eg, heatwaves).
In 2008 total European healthcare expenditure represented 9% of GDP

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Healthcare expenditure has increased constantly over the last few years, as shown in Chart 1. Chart 1 | Healthcare expenditure in Europe 19992008 (m)
m 1 200 000 1 000 000 6% 5% 4% 3% 2% 1% 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Healthcare expenditure*
*excluding capital investments Notes: Figures are for Austria, Belgium, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Italy, Netherlands, Norway, Portugal, Slovenia, Spain, Sweden, Switzerland and UK The growth slowdown in 2004 is mainly due to Germany, where a reform of the health insurance system notably led to a substantial reduction in physicians healthcare expenditure in the public system Source: National accounts except for Finland, Norway and Spain (OECD-Eurostat-WHO health accounts (SHA)) and Slovenia and UK (OECD data)

Healthcare expenditure

800 000 600 000 400 000 200 000 0 Real growth

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Real growth

II. Benefits of PMI for consumers

PMI improves consumers access to healthcare either directly or by filling the ever growing gaps in coverage left by public systems:
In 2008 private medical insurers (including mutuals) accounted for around 11% of total healthcare expenditure

Consumers

are free to choose their private medical insurer according to their needs, unlike a public healthcare system. Each PMI product is tailored, ie, it offers cover that is highly adapted to the needs of individual consumers. Through PMI, consumers can choose the healthcare providers they want, as well as the time and place of treatment (eg, hospital or private clinic). They have quicker access to healthcare (PMI reduces waiting lists) and receive better quality care. The sooner treatment is provided, the faster the patient recovers, reducing healthcare costs. PMI therefore offers a healthier outcome for the patient. PMI offers financial security to patients through a wider scope of reimbursement (eg, co-payments1 of public healthcare insurance schemes can be at least partially covered). PMI can insure against the costs of new and better medical treatments, as well as more efficient drugs. Private medical insurers operate in a competitive market, which results in lower medical costs and improved quality and efficiency of healthcare, to the advantage of all consumers. Private medical insurers aim for greater efficiency and quality through network management, patient mobility (PMI has, in most cases, pan-European cover within the frame of the EUs Third Non-life Directive) and cost control. PMI manages the risks of medical costs over time and between policyholders. New EU member states that are transforming their national healthcare systems (eg, Slovakia) use PMI as an element of their reform to ease the pressure on the public healthcare system.

Chart 2 | Benefits paid by health insurers in Europe 19992008 (m)

m 90 000 80 000 70 000 60 000 60% 50% 40%

Benefits paid

40 000 30 000 20 000 10 000 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Benefits paid Real growth

20% 10% 0% -10%

Note: Figures are for Austria, Belgium, Croatia, Cyprus, Denmark, France, Germany, Italy, Malta, Netherlands, Portugal, Slovenia, Spain, Sweden, Switzerland and UK. The high increase in benefits paid in 2006 is due to reform of the Dutch healthcare system. Source: CEA 1 Co-payments are payments made by an individual who has private medical insurance, usually at the

time treatment is received, to offset some of the cost of care CEA | 9

Real growth

50 000

30%

III. Main types of PMI in the European Union

The EUs various PMI systems result from the economic, historical, cultural and political characteristics of the different public healthcare systems

Operating alongside public healthcare systems across the EU are a great variety of PMI schemes. Such diversity is the result of economic, historical, cultural and political factors. It is also directly linked to the growing gaps in consumers access to public healthcare systems, the coverage offered by those systems and the differences in regulation and private insurers business requirements (eg, supervision). PMI has four basic categories: the voluntary additional (complementary and supplementary), duplicate and substitute PMI models and mandatory PMI.

III.1 Voluntary PMI models

III.1.1 Additional (complementary and supplementary) PMI The most common form of PMI, additional (complementary and supplementary) cover is a voluntary cover that completes or supplements the health insurance needs of the people covered under the public healthcare system. Due to extensive product development, the distinction between complementary and supplementary is not always clear; indeed, most additional PMI is a combination of both. However, certain differences between these two models can still be highlighted: Complementary PMI An extension of cover is offered in the same areas of care as statutory healthcare (such as dental care) or for (part of) the remaining costs not covered by the statutory system (as in Denmark, France, Italy and Slovenia). Benefits paid by complementary PMI are obviously influenced by the nature and extent of the benefits covered by the public healthcare schemes. As a co-sharing scheme, complementary PMI may fill gaps in benefits under the public system, for example to guarantee additional payments for medication or to provide broader choice of treatments or of healthcare providers. Supplementary PMI This offers additional cover in those areas of care that public healthcare systems do not cover or to which there is very limited access (eg, in the Netherlands where consumers can choose it in addition to mandatory PMI). The extent of the additional cover depends on the scope of the public health cover and on the expectations of consumers. It might include alternative medicine, (faster access to) hospitalisation in private clinics, additional charges for luxury accommodation or treatment by a senior physician. It therefore offers additional choice, to the benefit of consumers. The advantages of additional PMI Active cooperation between public healthcare systems and providers of complementary or supplementary PMI can lead to significant cost-sharing and helps to ensure that consumers retain access to the care they expect. For example, access to PMI cover can be an important social objective in member states where certain vital health services and products are not covered by the public healthcare system. III.1.2 Duplicate (alternative) PMI As its name suggests, duplicate PMI operates in parallel with the public healthcare system, offering a private alternative or duplicate cover (as in the UK, Spain and Portugal).

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Duplicate PMI provides quicker access to a wider choice of healthcare facilities for the insured, who remains entitled to full state-funded care. A duplicate scheme provides alternative options for accessing some of the types of healthcare that are already financed by the public system. Such a scheme is usually found in states where the insured wants the convenience of choosing the healthcare provider and the facility at which the care will be provided. Consumers choosing this kind of private insurance are not exempt from compulsory tax contributions towards state-funded care, and the policyholder usually pays twice (for, technically, double cover). The advantages of duplicate PMI These solutions improve the responsiveness of a health system to policymakers efforts to rationalise public health expenditure. Duplicate insurance reduces the pressure on public budgets, but depends on a persons willingness to pay. Policyholders choose to have privately funded healthcare, which frees up state-funded health services for others, while continuing to contribute to the state system through their taxes. This type of insurance can result in differences in access to care and cover depending on insurance status. III.1.3 Substitute PMI Substitute health insurance refers to PMI that replaces, or is a substitute for, publicly funded healthcare. Thus, the cover offered by the substitute PMI must at least equal the one offered by the public scheme. As the privately insured are not entitled to public funding for the relevant care, they must pay bills/invoices issued by healthcare providers directly and then claim reimbursement from their insurers under the terms of their policy. Substitute PMI is purchased by individuals who are excluded (voluntarily or by the definition of the system, ie when their income is above a certain ceiling) from participating totally or partially in the public healthcare system, as in Germany, Spain (civil servants) or Austria (the self-employed). In some states, such as Germany, private medical insurers have to build up ageing reserves. The insureds pay slightly more when they are young in order to pay slightly less when they get older. Such reserves, as well as any additional contributions, are not only a means of mitigating premium increases due to ageing but are also used to reduce premium increases once policyholders reach the age of 65. The advantages of substitute PMI With substitute PMI, the insureds are usually charged more for their medical treatment than the actual costs. The profits generated enable healthcare providers to invest in advanced technology for the diagnosis and treatment of all patients, including the vast majority of the publicly insured, and thus help to maintain high quality healthcare services in the entire healthcare system. For consumers, substitute PMI offers the choice of cover tailored to their needs, including benefits that are not provided by public schemes (in Germany, for instance, it includes treatment by a senior physician and private accommodation in hospitals, as well as free choice of physicians and hospitals).

III.2 Mandatory PMI

In the Netherlands, it is mandatory for all residents to take out health insurance. Under mandatory PMI, all residents have access to healthcare insurance and services, regardless of their household income levels or their individual health status. Premiums for mandatory PMI are calculated in the same way for all insureds.
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The Dutch public-private healthcare system has been in place since 2006 and is the only example of a mandatory PMI scheme in the EU

The system is operated by PMI companies but is combined with such public guarantees as solidarity (risk solidarity and income solidarity, which are maintained), accessibility (access is guaranteed by the Health Insurance Act) and affordability (people pay both an income-related premium and a nominal or flat-rate premium). The PMI companies offer a standard package of basic healthcare cover. Beyond this, consumers can take out a supplementary PMI that is voluntary and adapted to their specific needs. In the basic mandatory public-private PMI, the absence of risk selection is made possible by a publicly-run pooling/risk equalisation scheme through which health insurers are compensated for various levels of health risks (partly ex ante, partly ex post) and for high-cost claimants (ex post). The risk equalisation scheme is financed by a special tax. Each health insurance company can set its own tariff for the basic mandatory health insurance, just as it can for the supplementary health insurance. However, as the scope of the basic health insurance is, in principle, the same for everyone, community (flat) rated premiums vary only slightly. Premium discounts up to a limit of 10% can only be offered through group contracts for employees or affinity groups. The supplementary health insurance packages differ substantially from very limited to broad cover, and the tariffs differ accordingly. The advantages of mandatory PMI The rules set by the Dutch government have resulted in intense competition between private medical insurers, which in turn has led to cost control, ie no premium increases. There is a level playing field between all private medical insurers. Insurers strive to offer good quality healthcare services at low premiums. Indeed, although making profits is allowed, competition for market share keeps any profits low. Dutch private medical insurers thus contribute to a sustainable healthcare system and satisfy a growing demand for healthcare services in a sector with historically rising costs that used to be almost entirely public.

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IV. Common characteristics of PMI

PMI offers financial protection for individuals against unexpected health-related events. It is a private contractual agreement under which an insurance company provides, or compensates for, healthcare services that are provided for a specific health event (accident or illness) in exchange for the payment of premiums by the policyholder. In principle, all health-related risks can be insured if the insurer can quantify the probability that they will occur and their expected costs.

IV.1 Legal framework

Private medical insurers operate within a specific legal framework. Stringent prudential and supervision rules apply to their activities on a sole, group or conglomerate basis and ensure good risk management practices. Insurers also have to comply with competition law and state-aid rules as well as data and consumer protection, insurance intermediation, financial transparency and accounting rules. Private medical insurers operate in a highly competitive market, which leads to better quality care and lower premiums. Public healthcare schemes, however, are not required to apply such rules. Furthermore, they rely mainly on state-imposed taxation and/or social contributions. Their purpose is to ensure access to basic healthcare cover. They apply the principle of solidarity and often exclude risk selection.

IV.2 Individual and group contracts

PMI policies can be purchased by individuals, groups or employers. When subscribing to a group policy, employers seek to cover the specific needs of their staff. PMI offers financial protection for their employees, and possibly their dependents. Group policies are usually cheaper.

IV.3 Risk assessment and actuarial calculations

In individual and small-group insurance, PMI spreads the risk of an individual with other individuals over time. Differentiating between various risks on the basis of a comprehensive risk assessment is vital to PMI and beneficial to consumers. In other words, insurers treat equal and comparable situations equally, and different situations differently. When insurers are able to price applicants accurately, it is the consumers who eventually benefit from fair prices and a more competitive industry. Prohibiting the use of risk factors inhibits the industrys ability to price products fairly and accurately and to provide broad insurance cover. Insurers need to understand the risks they cover and to be able to differentiate between the exposures and vulnerabilities of various classes of risks. This entails offering differing cover and premiums2. Risk assessment means that substandard risks may become insurable. Insurers analyse carefully which risks they can cover and, if this is possible, they do so at an adequate price. The insureds who represent higher risks than the average can join the appropriate class of similar risks and pay the corresponding premiums. Thanks to enhanced possibilities for risk assessment (eg medical progress, increasing experience), the ability to insure different kinds of risks has been extended over time, allowing insurers to cover ever more consumers. However, it is possible that a limited number of applicants are indeed uninsurable because of the specific, extraordinary risks they represent to the insured community.
2 In the Netherlands, risk selection cannot be applied to the mandatory basic PMI, only to supplementary PMI.

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Any situation in which insurers are prohibited from correctly assessing applicants would bring into question the fundamental principles of insurance and could have the following consequences for insurers and their insureds:

an inappropriate rating of the applicant (ie, under-pricing); more frequent and more costly claims, adversely affecting the insurer who is unaware of adverse
the reality of the risks submitted; selection3 leading to higher premiums for all insureds, and possibly to the withdrawal from the market of the product(s) affected; higher claim costs detrimental to all insureds (a significant premium increase in order to offset an unexpectedly higher number of claims or larger claim amounts); and, financial losses and a loss of competitiveness in the market for the insurance company.

State intervention in a competitive market should be minimal. Unless the state offers compensation, it should not intervene in general insurance principles such as actuarial calculations of premiums, risk assessment and differentiation, product design, or the acceptance of policies.

IV.4 Premiums
Total gross written PMI premiums reached more than 96bn in 2008

The calculation of premiums in voluntary individual PMI is based on fundamental actuarial principles and is usually determined according to the scope of the cover as well as other criteria such as the age or the state of health of the insured at the time the contract is concluded. This calculation method aims to ensure that all members of a group of applicants presenting the same level of risk pay the same level of premiums, and that those premiums are sufficient to cover the claims arising from that group.

IV.5 Data management and protection

The collection of statistical data and information on risks is essential for private medical insurers. The insurers do not merely provide financial support to policyholders but can also be active partners in that they can monitor the appropriateness, quality and safety of the care the insureds receive. Private medical insurers manage administrative data and specific health-related information. This is vital to initiate preventive programmes and follow-ups, to arrange the proper planning of clinical services, to ensure the quality and safety of healthcare, to analyse the appropriateness and cost effectiveness of healthcare, to avoid fraud, and to avoid failures in healthcare provision that would be detrimental not only to the individuals concerned but also to the community of insureds. The data of consumers is currently protected as insurers may not use personal data without prior consent. Private records are only obtained when explicitly necessary as part of the application and the claim settlement processes, and within the framework of applicable data protection and professional secrecy rules. Any further restrictions on access to data would impose practical difficulties and higher costs for insurers and policyholders. When managing personal data, insurers follow detailed data protection clauses that are outlined in the insurance application form and in the policy conditions.
3 Those with lower-risk profiles may purchase less insurance (because of the increase in the price

compared with previously), and/or those with higher-risk profiles may purchase more. The average risk in the market could therefore rise, and overall insurance coverage levels could fall. This adverse selection process would require average prices to increase further to cover the higher cost of provision for the remaining group of insureds. As a result, more lower-risk consumers may exit the market. 14 | CEA

IV.6 Improvement of health services

Through its ability to respond swiftly, flexibly and appropriately to the requests of the insured, PMI provides an essential contribution to improving the efficiency, price and quality of the care provided to consumers. The sooner individuals are treated, the faster they generally recover, so this reduces the need for treatment and, ultimately, reduces the overall cost of healthcare for all. Competition between private medical insurers improves customer service and keeps costs down, while providing more and better quality care. The PMI sector has the means to find more responsive and efficient answers to policy challenges in the health sector and to cushion the consequences of decreases in public healthcare budgets, for example when there are long waiting lists for state-funded healthcare.

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V. Challenges and recommendations

V.1 Challenges
The sustainability of EU social security systems and public health policies is under growing pressure. Leaving aside the potential impact of climate change, the European Commission estimates that overall EU spending on healthcare will increase to roughly 140% of 2000 levels by 2050. Increases in health expenditures in past decades have been driven by policy decisions to expand access to healthcare, by demand for better quality healthcare linked to growing income levels and by new medical technology4. Future levels of health-related expenditures are likely to be affected by additional factors such as demographic problems (ageing populations) and climate change (eg more frequent heatwaves or floods). This should be considered in the broader context of the growing pressures on public expenditure, including that on pension systems; if EU member states do not reform their current pension systems, the public debt of the EU will reach around 200% of EU-wide GDP in 20505. PMI has the advantage of being financed by funding methods that may mitigate demographic problems considerably. If individuals contributions are capitalised until benefits are paid out, a transfer of the financial burden to future generations is avoided.

V.2 Recommendations
PMI products offered by private insurers could play an even more important role in ensuring that European public healthcare and welfare remain accessible, affordable and of adequate quality for future generations. To achieve good healthcare for all throughout the EU, healthcare systems, services and providers, as well as private medical insurers, will have to work in close cooperation and in an environment in which all operate on a level playing field to develop constructive, dynamic and interactive relationships with policyholders and consumers. The CEA therefore makes the following recommendations:

Improving funding mechanisms

A balance should be created between generations in the sharing of funding needs that limit health-related expenditures. Governments may find solutions that maximise the benefits of public systems and private insurance by taking into account the limitations and strengths of both, in order to ensure the sustainability of health systems.

Ensuring a level playing field between all stakeholders

It should be recognised that private medical insurers have a role to play alongside national governments in providing comprehensive and balanced healthcare cover for EU citizens. Governments should therefore implement the appropriate legislation (eg, competition rules) to ensure a level playing field between statutory health insurance schemes and private medical insurers that are involved in such public schemes, as well as between private medical insurers and similar entities.

4 The impact of ageing on public expenditure: projections for the EU-25 Member States on pensions,

healthcare, long-term care, education and unemployment transfers (2004-1050), Special Report N1/2006, European Economy, 2006, EC Directorate General for Economic and Financial Affairs 5 The long-term sustainability of public finances in the EU, [SEC(2006)1247], p.5, Communication from the European Commission to the European Parliament and Council 16 | CEA

 Taking account of the diversity of EU healthcare systems

When regulatory initiatives are taken at EU level that affect PMI, those initiatives should take into account the diversity of national healthcare schemes in the EU.

Introducing and encouraging prevention schemes

PMI can include incentives for the insured to take action to keep healthy, such as including gym membership with the insurance cover. Other initiatives include private medical insurers providing information on keeping healthy on their websites.

Promoting health education and information

Health education and information initiatives should be promoted in order to reduce health inequalities in the EU and raise awareness about PMI and private healthcare financing.

Developing occupational health schemes

Employers should be encouraged to develop occupational health programmes in partnership with private medical insurers, for example by providing them with tax incentives.

Improving the quality of healthcare

The use of appropriate health interventions and the elimination of clinically unnecessary procedures or inefficient old, obsolete technologies should be encouraged.

Mitigating the costs of medical innovation

The costs of medical innovation (in relation to medical devices, equipments or drugs) are becoming a growing issue, especially in the context of an ageing society. The speed of innovation is leading to an explosion in healthcare costs. A solution must therefore be found that takes this into account and mitigates its impact on both public healthcare systems and PMI.

Improving the fight against fraud

Health insurance is particularly affected by fraud, especially because of the high amounts involved. Private medical insurers have therefore developed efficient prevention and detection policies to counter healthcare fraud, but a lot remains to be done. The fight against fraud could be improved through, for example, wider promotion of good antifraud practices or the development of the support of private medical insurers for public authorities and entities such as national fraud bureaux.

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Private medical insurance in the European Union is available on the CEAs website: www.cea.eu CEA aisbl Brussels, January 2011 All rights reserved Design: Corentin Pollet Private medical insurance in the European Union, January 2011 is subject to copyright with all rights reserved. Reproduction in part is permitted if the source reference Private medical insurance in the European Union, CEA, January 2011 is indicated. Courtesy copies are appreciated. Reproduction, distribution, transmission or sale of this publication as a whole is prohibited without the prior authorisation of the CEA. Although all the information used in this publication was taken carefully from reliable sources, the CEA does not accept any responsibility for the accuracy or the comprehensiveness of the information given. The information provided is for information purposes only and in no event shall the CEA be liable for any loss or damage arising from the use of this information.

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