Many of us here in Belgium feel that the worst of the crisis has passed and that our economy is picking up again, outperforming most other countries in the eurozone. We realise that a fresh round of cuts is inevitable but some are already toning down the initial estimates of 22-23 billion to 17 billion euros, and with a little good fortune in revenue, somewhat more fraud prevention here and somewhat more efficiency there, it seems as if things will stabilise without the need for too many painful measures. All that is still missing is a government …
Nevertheless pressure from the European institutions is increasing and rating agencies are threatening to downgrade the country's credit rating. And this external pressure is unlikely to abate even after the formation of a government that will only balance the budget by 2015. This apparent contradiction can only be explained by a different assessment period: in the short term and with a bit of good will, Belgium will balance its budget, but more structured adjustments will have to be made in the long term in order to be able to finance the increasingly looming problem of an ageing population.
The ageing problem is obviously not a new phenomenon, but the focus at the outset was mainly on the sustainability of pensions. Gradually, however, developments in health care have also begun to attract more and more attention. After all, the ageing of the population has a dual effect on health care: on the one hand, there is the immediate increase in direct medical expenses because older people statistically need more care, while, on the other hand, there are indirect and additional costs because more health care providers, hospitals and rest homes are necessary to be able to accommodate the increasing number of older people in need of care.
Regardless of which political solutions are chosen, we have gradually been realising it is best to make some added provision if current health care standards are to be maintained. Consumers have already started to turn towards the private health care insurance market. According to recent figures, almost 80% of the population are purported to hold some or other type of hospitalisation policy.
Backed by the success of these ‘classic’ hospitalisation policies, and armed with knowledge about the future ageing of the population and budgetary margin developments, providers of these products continue to capitalise on increasing risks such as hospitalisation, outpatient costs, loss of income, care or dependence, dental treatment and funeral services. Private health care insurers are developing a plethora of formulas and packages not only to cover the accompanying financial risks, but also to provide the necessary assistance, for instance by arranging a rest home or funeral. Supported by shrewd marketing (‘Will I find a good and affordable rest home?’ or ‘Will I get the funeral that I want?’), which plays on the valid (?) concerns of older people, these policies will no doubt find clients among anxious or wealthy individuals.
We may therefore expect new policies with wider cover in future – like those that DKV is already launching now – which take advantage of the lower statutory contributions of health insurance providers. The health insurance funds also offer numerous types of supplementary insurance and all kinds of additional contributions.
The future benefit of wider health care policies therefore appears justified to us because of the anticipated decrease in statutory contributions on account of the ageing of the population and the need to balance the budget. But is there also already a need to regulate this collectively at employer level? The classic hospitalisation insurance is certainly a success story and often the most popular benefit from the package because of its immediate assistance with each contribution. However, with the exception of dental treatment, new policies are mainly focusing on dependence and costs in older age. Although very useful, the benefit is thus mostly a long way off (even after retirement age) and this long period will probably lead to a lower appreciation among personnel. A good compromise to us seems to be ensuring adequate financial support by means of a group pension plan, by which each member of staff can decide for himself or herself whether additional dependence and care coverage is necessary. If loss of income in case of illness or an accident is moreover compensated by adapted invalidity cover, a socially-minded employer will already be providing a considerable supplement to decreasing social security coverage.
Perhaps there will be scope later, if the economic revival continues, to offer or reintroduce group policies for dental treatment or outpatient doctor fees? Anglo-Saxon companies already have a tradition in that sense. However, the basic question remains: who will pay for everything? One middle way could be to offer supplementary health care policies on an individual basis via the employer. The interest and appreciation among personnel for these products can be assessed in this way, in order for them to possibly bear the associated costs themselves at a later stage. There are developments on our horizon and with the impending changes for health care providers (which must regulate themselves in line with the level playing field of private insurers), the last word on this topic has clearly not been written yet.