Jan. 19th, 2010

maradydd: (Default)
Here in Belgium we have a health care system whose operations are prima facie remarkably similar to what has been proposed in the US -- with one major difference. See if you can spot it.

In Belgium, it is mandatory for all individuals to carry health insurance. There are several major insurance nonprofit corporations to choose from. Working people have their premiums covered at least in part by their employer; family members are covered this way as well; the unemployed, people on old age pensions, and people on disability have their insurance paid for by the government.

If you caught the word "nonprofit" in there, you get a cookie. Christelijke Mutualiteit, Socialistische Mutualiteit, and the other mutualities are very big businesses indeed -- but they have no stockholders. This means that the financial incentives for the mutualities are completely different from those of the publicly held US insurers, who are ultimately governed by their stockholders.

Okay, there are a couple of other differences. Insurance premiums are fixed at a specific percentage of one's salary, and it's the same percentage for everyone (I'm not sure how that works for the unemployed), so health insurance is essentially a flat income tax of 7.35%. (The computation isn't quite so direct for self-employed people, as social insurance contributions are tiered based on income and health coverage comes out of that -- so there ends up being an incentive to keep one's income at the top end of an income tier in order to minimise the percentage of one's income that goes to social insurance.) Costs for medical services and medications are also fixed by federal mandate, so there isn't this business of having to deal with different insurers maintaining different lists of what they will and won't cover.

Another interesting note is that insurance here doesn't cover all of one's medical costs -- just a very large percentage. A doctor visit costs me a net of 2 euros (22 up front, and I get 20 back from the mutuality); my blood pressure meds cost 8 euros for a six-week supply; [livejournal.com profile] enochsmiles' chemo, which goes for $10,000 per dose in the US, sets us back roughly a hundred euros every two months. I suspect this acts as a disincentive against the "frivolous use of the system" that US conservatives are whining about, as a larger up-front cost, even if reimbursed, is perceptually more of a burden than if one were to pay the net cost up front.

Now, I'm not thrilled that health coverage in Belgium is literally a command economy. I've been affected indirectly by some of the dumber top-down decisions (mostly having to do with changing up the pharmaceutical formulary), and I do think the system stifles innovation. However, I also think the country has done a pretty impressive job into turning a negative good (health insurance) into a net benefit for the population while keeping individual disutility (the cost of premiums and out-of-pocket medical expenses) low. Compare this to 22% of household income for American middle-income families with individual coverage, and I definitely think it's worth looking under the hood of the Belgian system to see how they pulled it off.

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maradydd

September 2010

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