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Once covered, forever covered: The actuarial challenges of the Belgian private health insurance system

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  • Hanbali, Hamza
  • Claassens, Hubert
  • Denuit, Michel
  • Dhaene, Jan
  • Trufin, Julien

Abstract

The Belgian Law of 20 July 2007 has drastically changed the Belgian private health insurance sector by making individual contracts lifelong with the technical basis (i.e. actuarial assumptions) fixed at policy issue. The goal of the Law is to ensure the accessibility to supplementary health coverage in order to protect policyholders from discrimination and exclusion, essentially when these operate on the basis of age. Due to the unpredictable nature of medical inflation risk and the difficulty to model future increases of health claims, the legislator introduced medical indices together with a specific updating mechanism, which aim at establishing standardized and fair premium adjustments across the sector. This paper considers two major issues of the current Belgian system. The first one is related to the transferability of the reserves, whereas the second one is related to age-discrimination. We discuss these issues and their interplay, and we address the conflict between the goal of the Law and the practical problems arising in the light of the actuarial techniques.

Suggested Citation

  • Hanbali, Hamza & Claassens, Hubert & Denuit, Michel & Dhaene, Jan & Trufin, Julien, 2019. "Once covered, forever covered: The actuarial challenges of the Belgian private health insurance system," Health Policy, Elsevier, vol. 123(10), pages 970-975.
    • Handle: RePEc:eee:hepoli:v:123:y:2019:i:10:p:970-975
    DOI: 10.1016/j.healthpol.2019.07.005
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    References listed on IDEAS

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    1. Dhaene, Jan & Godecharle, Els & Antonio, Katrien & Denuit, Michel & Hanbali, Hamza, 2017. "Lifelong Health Insurance Covers With Surrender Values: Updating Mechanisms In The Presence Of Medical Inflation," ASTIN Bulletin, Cambridge University Press, vol. 47(3), pages 803-836, September.
    2. Wolfram F. Richter, 2009. "Germany goes ahead with Health Vouchers," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 7(3), pages 53-60, October.
    3. Michel Denuit & Jan Dhaene & Hamza Hanbali & Nathalie Lucas & Julien Trufin, 2016. "Updating mechanism for lifelong insurance contracts subject to medical inflation," Working Papers Department of Accountancy, Finance and Insurance (AFI), Leuven 544624, KU Leuven, Faculty of Economics and Business (FEB), Department of Accountancy, Finance and Insurance (AFI), Leuven.
    4. repec:ces:ifodic:v:7:y:2009:i:3:p:14567062 is not listed on IDEAS
    5. Wolfram F. Richter, 2009. "Germany goes ahead with Health Vouchers," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 7(03), pages 53-60, October.
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