Although the volume of underwritten premiums is quite low, compared to the positive estimations at the end of 2005, health insurance has a significant potential, confirmed by the increasing number of companies interested in this segment and by the forecasts indicating that, by 2010, the relevant market will reach the level of EUR 150 millions.
Specialists agree that, in fact, this is the only solution to revitalize the healthcare system in our country.
Given the context, the Private Health Insurance Day, organized on Thursday, the 24th of May this year, at FIAR - the International Insurance-Reinsurance Forum, brought together leaders and specialists of the main insurance, reinsurance and brokerage companies from Romania and from abroad, representatives of the Insurance Supervisory Commission, the specialized commissions from the Parliament, the Ministry of Public Health, the county health insurance houses, the health care services providers and the media.
The debates during the two sections of the event were moderated by Gabriel IONESCU, President of HR Club, and by Ovidiu DEMETRESCU, General Manager LONDON Brokers.
The unanimous opinion of all participants to the event consisted in acknowledging the need to reform the current health insurance system.
We need a comprehensive private health insurance system, for everyone... The progress of this segment shall take place only when the entire population has access to such services, and not just the elite - this was the conclusion of the event expressed by deputy Marian Sorin PAVELIU.
At present, we have an operational legal framework and the possibility of deducting the expenses for private health insurance from the employer’s point of view. Still, one must understand that this law is just a framework law and requires some specifications..., estimates the quoted official, who continues by making reference to the Law on private health insurance.
Nevertheless, change cannot be conducted only by the political class, insurers must interact with it, make proposals to reach a formula that suits best everyone.
Also, Marian Sorin PAVELIU thinks that, given the lack of significant funds for funding the modernization of medical services, both from the equipment and the qualified personnel point of view, the only solution is the change of the system that undergoes a clear financial crisis.
The industry of health insurance, prepared for reform
The health insurance reform must be based on a public-private partnership that should consist, in its turn, of a series of bi or trilateral partnerships between insurers, healthcare providers, the Insurance Supervisory Commission, the National Health Insurance House, the Ministry of Health, and the other stakeholders, stated Dan CONSTANTINESCU, Member of the ISC Board.
For the system to work well we need a clear definition of the responsibilities of each party involved and the concerted action of partners. Also, the terms of complementary and supplementary insurance cannot be clarified precisely, given the lack of a basic benefits package, states the official.
Sorina NICULESCU, General Manager SIGNAL Iduna Services, added: Besides the obvious need of a clearly defined basic package, deductibility of private health insurance must be extended, as at present this only exists at the level of the employer and the natural persons. Thus, it will be possible to overcome the low penetration rate, registered at the end of last year.
The private health insurance segment recorded, in 2006, a real increase of 68.22%, up to RON 46.2 million, representing the most spectacular evolution at the level of the whole Romanian insurance market. However, from the total underwritten premiums realized in 2006, the health insurance market has only 0.81% (with 0.19 percentages more then in 2005).
During the first quarter of the current year, the health insurance class had underwritten premiums of RON 11.33 million, an increase by 20.13% compared to the similar period in 2006.
The figures are quite modest, but they were obtained without any facilities in this respect, such as deductibility, added Dan CONSTANTINESCU.
The transfer of 5% from the national single health care system fund to the private insurance segment could create a market of EUR 100 million, with a growth potential of ten times in ten years, indicated Marian Sorin PAVELIU. The creation of this complementary system will hopefully lead to an increase in the competition among the health care services providers and thus it will lead to a higher quality of healthcare services, he stated.
At the moment, the national single health care system fund represents EUR 2 billion. The healthcare system is covered, in a percentage of 83%, by the compulsory public system, and 17% are the voluntary insurance, subscriptions and direct payment services, added Marius COVLESCU, Advisor to the Ministry of Public Health.
He believes that, once the basic benefits package is defined, complementary type of voluntary insurance shall be developed and this will un-burden the public system, which will lead to a higher quality in the medical act.
But despite the high potential for development of the health insurance market, this can be exploited only if fiscal facilities are granted to potential customers.
The current deductibility, set within a limit of EUR 200, does not stimulate enough the corporations to buy health insurance for the employees, a situation that might seriously shatter the optimism of these forecasts.
Thus, according to Mircea OPRESCU, Health Department Manager, INTERAMERICAN, „In such a situation, we have two solutions: either we give up the association of the health insurance premium to the salary, which is no longer taxed, and in this case, the deductibility limit of EUR 200 shall be maintained, or we continue to associate the premium to the salary, then tax it, but in this case, the contributions must by subject to total deductibility.
The law has its flaws, especially with regard to the deductibility and the connection between complementary and supplementary insurance and the substitutive ones, stated Dan CONSTANTINESCU, who recommends the involved companies (insurers and medical care companies) to lobby at the Ministry of Economy and Finances for a higher deductibility, because this could encourage employers and employees in getting involved in the private health care system.
The law has its flaws, especially with regard to the deductibility and the connection between complementary and supplementary insurance and the substitutive ones, stated Dan CONSTANTINESCU, who recommends the involved companies (insurers and medical care companies) to lobby at the Ministry of Economy and Finances for a higher deductibility, because this could encourage employers and employees in getting involved in the private health care system.
Nevertheless, private health insurance, according to the MEDNET survey, with 17.9% of the votes, rank second in the top of extra-salary benefits wanted by the employees, the first one being, with 19.1% of the preferences expressed, the private pension.
It remains to be seen whether the optimistic forecasts of the specialists shall come true...
Mihaela CIRCU
