Bonus Options in Health Insurance by Peter Zweifel

By Peter Zweifel

Confronted with the ongoing fee enlargement within the overall healthiness care zone, coverage makers face a hindrance: proscribing ethical danger in treatment calls for that customers perform the associated fee, but copayment is strongly resisted by means of latest socially insured. therefore, the reports of 3 deepest German future health insurers can be of curiosity to physicians, social scientists, and coverage makers. Insurer A writes traditional plans with deductibles and coinsurance; B will pay again three-monthly rates as a set rebate for no claims; whereas C runs an experience-rated bonus method beginning with a rebate of three-monthly charges for the 1st yr with no declare, achieving a greatest of 5 after 3 years. whereas either rebates and bonuses are particularly renowned between insureds, this research exhibits that bonus concepts are relatively potent in proscribing the call for for ambulatory or even medical institution care. yet what approximately adversarial results on future health attributable to the need to save lots of one's bonus? in this factor, there's a few fantastic proof.

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By the same token, it can be shown that a deductible may exert a stronger effect on the demand for medical care than coinsurance even for treatment offers somewhat exceeding the value of the deductible. In Fig. 1, M 1 symbolizes such a more elaborate course of treatment. However, it is constructed to be equivalent to Mo from the point of view of a patient subject to the deductible, permitting him to attain point S*, which lies on the same indifference curve U 1 as does Q* (pertaining to Mo). This implies that going without any medical care will again be preferred by the individual depicted in Fig.

Prior to 1980, the amount rebated depended on the company's profit and loss situation and could therefore only be determined at the end of the business year. Moreover, the rebate used to be unrelated to premiums paid. Since 1980, however, insureds know the value of the rebate at stake from the beginning of the year. Being tied to the annual premium paid, the rebate has been increasing along with inflation in the health care sector. Insurer B also offers conventional cost-sharing plans besides comprehensive coverage under the title of ambulatory medical care.

However, a rebate offer may not only induce the insured to refrain from submitting a bill 48 5. Insurer B: Fixed rebatesfor no claims but rather from using medical services at all. It is this second effect that gives rise to the hope that such new insurance plans might contribute to cost containment in the health care sector. Rebate offer considered in isolation The effect of a rebate offer on actual demand for ambulatory medical care is shown in Fig. 2. To demonstrate that the effect is operative quite independently of the decision to submit or retain a bill, the treatment offered by the physician is assumed to coincide with the equivalence point P.

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