Health Insurance in the Netherlands.

The new health insurance system from 2006

Contents Foreword Introduction 1. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 2. 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 3. 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 4. 4.1 4.2 4.3 4.4 4.5 5. 5.1 5.2 Health Insurance Act Background Nature of health insurance Persons obliged to take out health insurance Management and administration Health insurance agreements and care obligations Care outside the Netherlands Entitlements to care Government grants Funding Risk equalisation Management and supervision Disputes Health Care Allowance Act Background Purpose of the Act Persons with legal entitlements Right to the health care allowance Implementation Funding Reference income Calculation of health care allowance Management and supervision Disputes (objections and appeals) The Exceptional Medical Expenses Act Background Nature of the scheme Insured persons Management, administration and contracts between insurers and health care providers Registration and validation of health care entitlements Care under the Act in other countries Care entitlements under the Act Government grants Funding Management and supervision Disputes International aspects Background Principles of international co-ordination Obtaining care in other countries Procedures at the European Court of Justice Treaty countries Related legislation Health Care (Market Conditions) Act Social Support Act

List of abbreviations Acts of Parliament

Foreword The Ministry of Health, Welfare and Sport receives many questions from the Netherlands and other countries about the insurance of medical expenses in the Netherlands. This booklet entitled “The new health insurance system in the Netherlands from 2006” meets the need for this information. This eighth edition of the booklet has been completely revised. The booklet summarises the health care insurance system existing at 1st January 2006. It also deals with other laws related to health care insurance. Certain matters covered in the booklet are the subject of proposed new legislation that Parliament was still discussing at the time of publication. We wrote the booklet mainly for people with knowledge of health care insurance. However, we have endeavoured to make it understandable for people without such prior knowledge. A Dutch edition of the booklet is available. The text can be downloaded from the ministry’s website at www.minvws.nl by keying in the search instruction “Health care insurance in the Netherlands”. The Hague, 1st September 2005

INTRODUCTION General European countries organise, manage and finance health care in different ways. But the systems share some common principles: universal access to care and insurance, solidarity in the distribution of costs and a good standard of care. While considerable similarities exist in policy issues, there are also significant differences in the way countries seek solutions. Each national system was created in its own particular way, with policy influenced by cultural, historic and instrumental factors. Developments in the Dutch care system The Dutch government is committed to maintaining a health care system that provides people with access to essential medical care of good quality. For many years the Netherlands had a fragmented system of health care insurance for normal medical care. This was due to historical reasons. Until 1st January 2006, a system of compulsory health care insurance covered a large section of the Dutch population. Other people had to take out private health care insurance. Some risk groups were able to obtain a policy covering a legally defined standard package of services. Certain groups of civil servants were covered by special compulsory private health care insurance. This fragmentation ended on 1st January 2006 with the introduction of a single statutory insurance regime that covers all residents of the Netherlands. It is called the Health insurance act. The new insurance regime was designed to contribute to the fullest extent possible to the provision of effective, high-quality health care. The new system retains and where possible strengthens some established rights, like the scope for private initiative, a relatively strong private law basis with accompanying financial responsibilities for medical insurers and good accessibility. Features of the care system The Dutch health care system has three important features: 1. The health care insurance system comprises three compartments: a. long-term nursing and care; b. care with a view to cure; c. supplementary insurances. 2. The offered care is predominantly of a private nature. 3. The health care insurance system is built on private law but incorporates strong assurances under public law. Insurance compartments Three insurance compartments Other countries have health care insurance systems that are typically subdivided into cover for sickness and maternity on the one hand and industrial accidents and occupational diseases on the other. The insurance of medical care required for industrial accidents and occupational diseases is embedded in the Netherlands in insurance schemes that cover the whole population. The Netherlands decided in 1967 to abolish separate insurances for industrial accidents and occupational diseases in order to reduce administrative costs. In practice it often proved difficult to determine whether the cause of the need for medical care was work-related or stemmed from the private setting. Disputes regarding this question imposed a heavy burden on the organisation responsible for implementing care laws and on the judiciary. The new Dutch health care insurance system consists of three compartments. The first compartment is a statutory insurance that covers the entire population against the costs of prolonged nursing and care. This entitlement is embodied in the Exceptional Medical Expenses Act. The second compartment is insurance against the costs of care with a view to cure. Everybody in the Netherlands has a legal obligation to take out insurance to cover this kind of care. This requirement is laid down in the Health insurance act. Together, the entitlements existing under the Exceptional Medical Expenses Act and Health insurance act offer all members of the public adequate cover against medical expenses. Everybody has the option of taking out supplementary insurance for types of care not covered by the Exceptional Medical Expenses Act or Health insurance act because they can easily be paid for by those who need them or are of a luxury nature. Private care Predominantly private nature of care

A characteristic feature of the Dutch health care system is that private companies offer most of the care. Like many other Western European countries, the Netherlands has a long tradition of help and care provided by local and regional voluntary organisations. Some of these organisations have their roots in the Middle Ages. The vast majority of hospitals and other care institutions are privately owned. They provide care as independent enterprises and not, as in some other European countries, as public sector organisations. Most care institutions continue to provide services on a non-profit basis, whereas individual care providers usually operate with a view to making a profit. Public and private insurance Hybrid insurance under public and private laws Private companies that are allowed to make a profit render care services focused on cure. However, Dutch lawmakers have imposed several conditions to safeguard the social nature of the insurance. This puts this element of public health care insurance in an area in between traditional social insurance and private insurance. Insurance for long-term nursing and care continues to be organised as traditional social insurance, however. It is carried out by implementing organisations under the Exceptional Medical Expenses Act (these are care insurers that have registered for providing services under the Act), but there are plans to modernise this insurance. Future Care system of the future The Dutch care system is at a crucial crossroads. The general development is that members of the public, care providers and care insurers will get greater responsibilities, must be more cost-conscious and will be confronted by the effects of these circumstances in terms of care and insurance. The government’s measures are designed to keep care accessible and affordable for everybody against a background of an ageing population and the increasing technological possibilities in the medical field. The introduction of the Health insurance act and the Health Care Allowance Act on 1st January 2006 is unlikely to be the final word on the restructuring of the Dutch health care insurance system. Significant amendments are still expected to the Exceptional Medical Expenses Act. The key question is how the Act can be carried out as effectively as possible in the longer term. The government will adopt a position on this matter in 2006 based on research currently in progress. However, the government has already decided that from 1st January 2007 some elements of mental care will be removed from the Exceptional Medical Expenses Act and accommodated in entitlements under the Health insurance act. The transfer of some types of mental care will remove the financial partitions between elements of curative care and will establish greater cohesion. The government further intends to introduce the Social Support Act. This law will transfer to local authorities responsibility for elements of care currently covered by entitlements under the Exceptional Medical Expenses Act. Figures Overview of the care sector One million people in the Netherlands work in the care sector (some of them part-time). Approximately 15.8 million people out of a population of 16 million had some form of health care insurance at 31st December 2005. Most of the people in the category without health care insurance are very affluent people who do not want cover, people who until introduction of the Health insurance act on 1st January 2006 had to take out private health care insurance but had their policies cancelled for non-payment of premiums and persons in the Netherlands illegally. Homeless people are a special group. They were covered by social insurance in principle but failed to register for it. A small group of uninsured persons is made up of people who at the reference date were changing from one insurer to another, i.e. they had cancelled their policy with one company but had not yet registered with another. Military personnel and imprisoned persons receive medical care from the Ministry of Defence and the Ministry of Justice, respectively. Approximately €46 billion circulated in the care sector in the Netherlands in 2005. The table below is a breakdown of spending according to the principal care sectors (in millions of euros).1

1

Source: State Budget 2005, Ministry of Health, Welfare and Sport, including care policy, Budget XVI.

Expenditure in the care sector in 2005 Prevention and healthcare protection Curative care Medicines and medical technology Care for the mentally ill, care for addicts and shelters in the community Care under the Exceptional Medical Expenses Act Care for the disabled and medical aids Nursing, care and the elderly Administration of health insurance schemes and miscellaneous expenses Nominal costs and contingences Total

million euros 236 17,304 4,463 3,582 1,360 5,832 11,240 1,258 620 _______ 45,895

Approximately 30 care insurers provide services under the health care insurance system. Some operate nationwide, others serve only a certain region of the country.

1.

Health Insurance Act

1.1 Background Discussion of system The Health Insurance Act came into force on 1st January 2006. It ended a decades-long discussion about abolishing the distinction between private health care insurance and compulsory insurance with health funds. In recent years the discussion had centred on whether the new insurance system should be one under private law with public law features or one under public law with private features. The only difference in legal terms is that private insurance is established by a person and an insurer concluding an agreement with each other. Statutory insurance (i.e. insurance under public law) is established by a person meeting the conditions laid down by law, such as being an employee with an annual salary below a certain level. Supporters of the private law approach saw the statutory approach as raising the spectre of excessive government regulation that would obstruct efficient insurance. Advocates of the statutory approach regarded the private variant as a threat to the solidarity required for social insurance. The discussion was dominated by concerns about the direction a new health care insurance system might take. Some feared that insurance organised under public law would over time assume an increasingly statutory nature with all the perceived government involvement. Others feared that insurance organised under private law would ultimately develop into purely private insurance without the solidarity needed for social insurance. In its second term of office, the coalition cabinet formed by premier Jan-Peter Balkenende opted for the private approach to health insurance regulated by law, but with strong statutory safeguards. The cabinet saw this as the best way of clarifying the division of responsibilities between government, public and medical insurers. The cabinet considered it a responsible approach because it created social insurance with scope for entrepreneurship in the care sector. But the system would be embedded in a robust legal framework with statutory assurances. It is an approach that amalgamates the social tradition of the health insurance fund and the market tradition of private insurance. History of plans Earlier attempts at bringing about reforms were all based on a system under public law. The most well-known plans are the Hendriks Plan (1974), Dekker Plan (1987) and Simons Plan (1992). These efforts failed for a variety of reasons. The second Balkenende cabinet agreed in the coalition accord of 16th May 2003 to introduce a compulsory standard insurance for the entire population. In a letter sent to the Lower House of Parliament on 19th December 2003 (Parliamentary Papers II 2003/2004, 23 619, No. 20), the Minister of Health, Welfare and Sport observed that health insurance funds and private medical insurers had converged significantly in recent years. The cabinet considered it a logical step in this development to bring together the different types of insurances in the Netherlands into one broadly-based standard insurance package for the entire population. The package covers the risks of medical care, medicines and medical aids to the same extent that prevailed under the health insurance fund system. The basic insurance has social safety nets. At the same time, the cabinet is keen to promote effectiveness and freedom of choice. It has declared its preference for risk-bearing insurance provided by private insurance companies. System under private law The decision by the second Balkenende cabinet to organise insurance under private law was not without legal complications. The European directives covering non-life insurance (“Non-life Directives) prohibit governments from imposing statutory regulations on private insurance in respect of the person they accept, the extent of cover and the premiums payable. This prohibition exists to ensure that insurance companies in Europe compete with each other on an equal footing without one insurer being disadvantaged in relation to another because of government regulations that curtail its freedom of enterprise. Yet the Dutch cabinet chose to incorporate statutory safeguards to protect the social nature of health care insurance precisely in the fields covered by the European prohibition of government regulation. The government has made it obligatory for a medical insurer to accept anybody who applies for insurance and to offer everybody the same insurance cover under the same terms and conditions. An insurer is not allowed to charge different premiums to persons it insures for the same range of services. Dutch lawmakers justify this apparent breach of EU rules by invoking the exception clause in Non-life Directives. The clause stipulates that the Non-life Directives do not apply to insurance schemes that fully or partly replace social insurance. The Dutch cabinet considers the exception

applicable because the new insurance system will replace the health insurance funds. Moreover, the cabinet takes the view that, in the final instance, it is possible to seek recourse to the public interest as justification for departing from European rules. The decisive factor for the second Balkenende cabinet was a letter from the European Commission dated 25th November 2003. In response to questions raised by the Dutch cabinet, the letter stated that the planned private law embodiment of the new insurance system could be deemed possible under European law, provided that government regulation did not go beyond what was strictly necessary and did not intervene more than necessary in the insurance market. Another consideration was a trend in jurisprudence at the European Court of Justice. Case law appears to indicate that the court draws a less strict dividing line than in the past between the free market on the one hand and social security organised under public law on the other. The court apparently sees scope for assuring the public interest through certain kinds of government interventions in the private market2. Based on these facts, the cabinet developed the Act governing social insurance for medical care for the entire population (“Health Insurance Act”). Health Insurance Act The Health Insurance Act makes it mandatory for everybody who resides or pays payroll tax in the Netherlands to take out health insurance. Every health care insurance company in the Netherlands that has stated that it will provide services under the Act has a legal obligation to accept anybody who applies for insurance. The Health Insurance Act defines insurance cover according to types of care. The care insurer may decide which qualified person or institution will provide the insured care. Similarly, the insurer may decide whether to provide the insured care to insured persons in kind or through reimbursement of costs they pay to the care provider they chose (also refer to section 1.6). In the latter case, the insurer has an obligation to help insured persons find available care if they request such assistance. It is also possible for the insurer to offer some types of care in kind and others through reimbursement. An insurer must always offer insured persons an insurance option without a personal excess. The insurer may offer a number of legally defined tranches of personal excess. People may choose any variant of insurance offered by the insurer. They may switch variant and insurer from year to year. An insured person pays a nominal premium directly to the insurer and also an income-related contribution. The insurer decides the size of the nominal premium. Insured persons up to 18 do not pay the nominal premium. The Health Insurance Act includes a no-claim refund system. People who use little if any care get back some of their nominal premiums from their insurer. The Inland Revenue Service levies the income-related contribution. Employers are required to reimburse their employees in full for these contributions. With a few exceptions, people drawing social security benefits are also entitled to reimbursement of these contributions from the authorities that administer their benefits. It is up to a pension administrator to decide whether to reimburse retired persons for all or part of the income-related contribution. The income-related contributions are deposited in the Health Insurance Fund along with a government contribution equal to the missed nominal premiums of insured persons younger than 18. One of the purposes of this fund is to pay insurers amounts related to the degree of risk of the people they insure. Health Care Allowance Act The Health Care Allowance Act took effect at the same time as the Health Insurance Act. Under the Health Care Allowance Act, people receive an allowance if the nominal premium is excessive compared with their income. The Inland Revenue Service pays out the allowances. The income of a person’s partner is taken into consideration when determining whether somebody qualifies for an allowance. Abolition of various acts, schemes for civil servants and private insurance The Social Health Insurance Act, the Medical Insurance (Access) Act 1998 and the Overrepresentation of Elderly Health Insurance Act Beneficiaries (Joint Financing) Act were revoked
See judgements of the European Court of Justice in the cases of Commission vs. Belgium (C-206/98), Commission vs. France (C-239/98), Commission vs. Italy (C-59/01) and Commission vs. Luxembourg (C-346/02).
2

on 1st January 2006. Insurance through health insurance funds and insurance under the Medical Insurance (Access) Act no longer exist. Private health care insurance and public law schemes for health care insurance for civil servants have been discontinued insofar as the insurance package is covered by that of the Health Insurance Act or foreign insurance that applies under EU Regulation No. 1408/71 of the Council of 14th June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the community (“Council Regulation”), or the European Economic Area (EEA) agreement, the agreement between the European Community and its member states on the one hand and the Swiss Confederation on the other on the free movement of persons, or bilateral social security treaties with other countries that include reciprocal arrangements for providing medical care. 1.2 Nature of health insurance

Insurance obligation Under the Health Insurance Act, all residents of the Netherlands and non-residents who are liable to Dutch payroll tax are required to take out health insurance with a health insurer. The insurance is not established automatically simply by a person meeting the criteria, as is the case with insurance under the Exceptional Medical Expenses Act. This is because a person must choose an insurer and conclude an insurance agreement. For their part, the care insurers are under obligation to accept anyone who applies for insurance. Legal status under private law Health insurance is organised under private law. The insurance is established by concluding an insurance agreement. In principle, the government is not involved in the insurance and, anyway, European rules prohibit such involvement. The Health Insurance Act lays down rules – proportionately – only for matters that require government interventions because of the public interest. This includes imposing an acceptance obligation on insurers, the obligation for them to offer people the same insurance variant for the same premium, and a statutory definition of the insurance cover. Against these obligations the insurers receive financial equalisation for the services they are required to provide (refer further to section 1.10). The care insurers are subject to the same rules applicable to the entire insurance market. Consequently, they are “normal” private companies that are allowed to make a profit and that are subject to the competition laws applicable to enterprises. Social health care insurance The Health Insurance Act provides for social health care insurance for the entire population. This makes the Council Regulation applicable and also the European Economic Area (EEA) agreement, the agreement between the European Community and its member states on the one hand and the Swiss Confederation on the other on the free movement of persons, or bilateral social security treaties with other countries that include reciprocal arrangements for providing medical care. 1.3 Persons obliged to take out health insurance

General rule for compulsory insurance Every person insured under the Exceptional Medical Expenses Act required to take out health insurance. The people insured under this Act are those that reside legally in the Netherlands or live in another country but work in the Netherlands and pay Dutch payroll tax. Refer to section 3.3 for the categories of people who must have this insurance. Many people take out their own health insurance, but somebody else can do it for a person under obligation to have insurance. For example, a person can take out insurance for his/her partner or children. An employer can do it for its personnel. For persons who cannot or may not personally conclude an insurance agreement (like minors), the arrangements must be made by a legal representative, guardian, family member or authorised agent. Exemptions from the insurance obligation The government has made two exceptions to the general rule that people compulsorily covered by the Exceptional Medical Expenses Act are required to take out insurance under the Health Insurance Act. Military personnel

Members of the armed forces on active service are insured under the Exceptional Medical Expenses Act but do not have to take out insurance under the Health Insurance Act. They receive care from the military medical services. This cover applies outside working hours as well as during deployment in the Netherlands and abroad. The Ministry of Defence is able to provide care on a scale that ensures optimum services under all circumstances to safeguard the health and deployment of members of the armed forces. This would not be possible under the Health Insurance Act. Therefore, military personnel have no obligation to take out insurance under the Health Insurance Act. Conscientious objectors Another exception to the insurance obligation has been made for people with conscientious objections. Those who object to insurance on principle pay no premiums under the Exceptional Medical Expenses Act. Nor are they required to take out insurance under the Health Insurance Act. However, they do owe the income-related contribution in the form of a substitute tax. This extra tax paid by conscientious objectors is placed on a separate account held with the Health Care Insurance Board. A conscientious objector may use the balance to pay for the costs of care similar to that covered by health insurance. 1.4 Management and administration

Care insurers Private health care insurance companies carry out the provisions of the Health Insurance Act. The insurers have been termed “care insurers” because the government wants them to act as effective, customer-driven organisers of care for the people they insure. A key objective of social insurance under the Health Insurance Act is to enable members of the public to receive the care they need. The care insurers, in their capacity as the administrators of the health insurance, play an important role in fulfilling that objective. Their role is not confined to paying the costs of provided care. Above all, they must ensure that insured persons can get care for which they are insured. This care obligation consists of supplying the insured care a person needs (the in-kind variant) or reimbursing the costs the person incurs for obtaining the care and, on request, undertaking activities to procure such care or services (reimbursement variant). Care insurers are required to establish an accounting system that satisfies the regulations for providing financial equalisation (also refer to section 1.10). A basic principle of social insurance is that insured persons must be able to exert influence on the policy of the company that insures them. This principle has been embodied in various international treaties ratified by the Netherlands. The treaties set standards for the form and content of social insurance. A care insurer’s articles of association must ensure that insured persons possess a reasonable degree of influence over the company’s policy. This approach is aligned to the corporate governance concept favoured by the Dutch government. Conditions for implementing the Health Insurance Act Licence from the Dutch central bank Health care insurance companies that operate in the Netherlands are not obliged to provide services under the Health Insurance Act. Dutch and foreign health care insurance companies have the right to decide whether or not they wish to carry out the Act’s provisions. If they choose to do so, they must hold a licence for the performance of non-life insurance services for the correct sectors (i.e. 1. accidents including industrial accidents and occupational diseases and 2. sickness). These licences are issued by De Nederlandsche Bank (DNB), the Dutch central bank, or by a sister regulator of DNB in another European Union member state. Registration with the Supervisory Board for Health Care Insurance (CTZ) Health care insurance companies must additionally be registered with the CTZ to allow supervision of the services they provide under the Health Insurance Act and to qualify for payments from the equalisation fund. Area of activity A care insurer must provide services and offer health insurance throughout the Netherlands unless it insures fewer than 850,000 people. In that case, the care insurer may confine its area of activity to one or more entire provinces of the Netherlands. The law does not allow care insurers to operate in parts of provinces. The government has imposed these conditions to promote competition between

“large” care insurers while offering a possibility for new market entrants to establish a footing in a limited area of activity. 1.5 Health insurance agreements and care obligations

Health insurance agreement A person must take out health insurance with a care insurer within four months of establishment of the insurance obligation in order to comply with the law. He/she may conclude the agreement with any care insurer in the province where he/she lives or works. A person will wish to consider various matters when choosing a care insurer. They include the form in which the insurance is offered (in kind or reimbursement; see below under the heading “Care obligation”), the different levels of low risk offered by the care insurer, the nominal premium that is payable for them and the services available from the insurer. People with an obligation to take out insurance may use initiatives like an internet website – www.kiesBeter.nl – that provides an overview of all care insurers, their terms and conditions and their offerings. This website also provides comparisons of the model agreements of care insurers. Supplementary insurance If desired, a person may take out supplementary insurance in addition to health insurance. The supplementary insurance is unrelated to the health insurance. It is private insurance for which the government is not allowed to impose any rules other than those existing under the general supervision of the insurance industry by the Dutch central bank (DNB). An insurer is therefore under no obligation to accept a person for supplementary insurance. Private health care insurance companies determine the scale of the supplementary cover they offer and the level of the premiums. Cancellation of supplementary insurance not allowed when people change insurer The Health Insurance Act does stipulate, however, that a care insurer is not allowed to cancel supplementary insurance if a person decides to take out health insurance with a different care insurer. Penalties for concluding health insurance late Fine If a person fails to meet the insurance obligation or to meet it on time, the individual care insurers will impose a fine on behalf of the Health Care Insurance Board if the person subsequently applies for health insurance. A person who takes out health insurance late will owe, besides the premium for the insurance, a fine equal to 130 per cent of the nominal premium for the health insurance. The fine is payable over the number of months that somebody was not insured (subject to a maximum of five years). No fine No penalty will be imposed if a person is not to blame for the failure to take out health insurance or if a justification exists for not doing so. This will be the case, for example, if a person did not take out health insurance on time because of a psychiatric disorder. If imputable grounds exist for the failure to obtain insurance, the size of the fine can be reduced if a person can show that it is too high on account of exceptional circumstances. During the period of non-insurance, a person obviously has no entitlement to reimbursement of costs incurred for care or to the health care allowance (refer to section 2). But a person under obligation to have insurance will always owe the income-related contribution over salary or equivalent income components, even if the person did not take out insurance. Acceptance obligation Every care insurer is under obligation to accept any applicant for health insurance that it provides in the applicant’s province. The care insurer is not allowed to differentiate the premium according to personal characteristics like age, gender or medical situation. Insurers receive compensation for the acceptance obligation in the form of an equalisation scheme that makes good any financial disadvantage they incur (refer to section 1.10). Term An insurance agreement has a term of one calendar year. The agreement may be renewed tacitly, but if desired the insured person has the right after one year to choose a different care insurer or different model agreements. The person must inform the care insurer in good time of the decision not to renew a contract. It is possible to change to a different care insurer before expiry of a calendar year if an insurer raises its premiums in the course of the year.

Policy The care insurer is required to issue a care policy every year to every insured person as proof of the existence of the health insurance agreement. The policy sets out the content of the health insurance agreed with the insured party (in terms of rights and obligations). Information obligation A person who takes out health insurance has a legal obligation to inform the care insurer immediately of all facts and circumstances that may result in the ending of the insurance. These could include, for example, discontinuation of the insurance obligation due to circumstances like a move to another country or move to a place outside the care insurer’s area of activity. The Health Insurance Act stipulates that the insurance will end in circumstances like these. For its part, the care insurer has an obligation to provide information to the people it insures. This applies, for instance, if a redrawing of the insurer’s area of activity means that they no longer live in the area of activity. Care obligation Care obligation Making sure that people can obtain the care they need is a key objective of the Health Insurance Act. As the parties that provide services under the Act, the care insurers play an important role in achieving that objective. Their role is not confined to payment of costs. Above all, they must make sure that people are able to obtain insured care. This is referred to as the care obligation. An insured person is entitled to care under the following models: In-kind model 1. The care insurer provides insured care needed by the insured person through its own care providers or through care providers that it has contracted. The care provider receives payment directly from the care insurer. This is called the in-kind model. An insured person is free to choose from any of the insurer’s own or contracted doctors or hospitals. If a person wishes to receive care from a different, uncontracted care provider despite his/her decision to take a policy with contracted care, the care insurer will decide the level of cost reimbursement that it will award. This allows the care insurer to on-charge the costs it has incurred by contracting care to insured persons who choose an uncontracted care provider. However, the insurer is not allowed to set the reimbursement so low that it would in effect make it impossible to obtain uncontracted care. Reimbursement model 2. Under the reimbursement model, a person receives care from a care provider with whom the care insurer has no contractual relationship. The insured person pays for the provided care and receives reimbursement of the costs from the care insurer. The care insurer is not allowed to set a maximum for the reimbursement, but has no obligation to reimburse a person more than is reasonable by prevailing market standards in Netherlands. An insured person can use the care provider of his/her choosing. If the care insurer does not offer the required care through its own or contracted care providers, it has an obligation to help the insured person find the care if requested to do so. This kind of assistance can vary from making a simple telephone call to conducting talks with a care provider to ensure the insured person receives care. Combination of in-kind/reimbursement models Different kinds of variations are possible within the models outlined above. They include a combination of the in-kind and reimbursement models whereby the care insurer provides some of the insured types of care through its own or contracted care providers and others under the reimbursement model. By offering these models, a care insurer is able to tailor its services to fit the wishes of the people it insures. 1.6 Care outside the Netherlands

Worldwide care The Health Insurance Act provides worldwide cover. No matter where they are in the world, insured persons are insured in exactly the same way as they are in the Netherlands. The cover is for the Dutch package of services under the Dutch terms and conditions and tariffs. An insured person may choose to have the cover under a reimbursement policy, in-kind policy or combination thereof.

The rights of an insured person who obtains care under his/her health insurance agreement depend on the type of policy. Care obtained under health insurance Reimbursement policy An insured person who has opted for a reimbursement policy has the right to go to any care provider in a foreign country. It makes no difference whether the care provider is or is not established in an EU/EEA member country or a treaty country. The insured party with a reimbursement policy will be entitled to reimbursement of the costs of obtained care. However, this does not necessarily mean that the person will in all instances be reimbursed for the full amount of the costs of care. Under the Health Insurance Act, the care insurer is not under obligation to reimburse more than the prevailing market rates payable for similar care in the Netherlands. When obtaining care in a foreign country, an insured person should check whether the care is included in cover under the Health Insurance Act. In-kind policy If an insured person has an in-kind policy, he/she will usually have to use care providers contracted by the insurer. The insurer may contract care providers in the Netherlands and in other countries. Therefore, a person may obtain care abroad under an in-kind policy, provided that the insurer has contracted care providers in the country concerned. But the law allows an insured person with an inkind policy to go to an uncontracted care provider in the Netherlands or abroad. The consequence of such a decision is that the insured person will not be entitled to full reimbursement of the costs of the received care. The insurer is allowed to determine the size of the reimbursement. When obtaining care in a foreign country, an insured person should check whether the care is included in cover under the Health Insurance Act. Combination of reimbursement/in-kind models As mentioned above, a care insurer may offer a combination of these two types of policies. The variant specified in the policy for the type of care concerned will apply. Treaty arrangements Obtaining care under treaty arrangements The paragraphs above described a situation in which an insured person obtains care outside the Netherlands under the policy model that he/she has chosen. In a treaty country, however, the person may also obtain care under international social security arrangements. In the member states of the European Union and European Economic Area and in Switzerland, every insured person who is entitled to medical care under the Council Regulation, the EEA agreement and the agreement between the European Community and its member states on the one hand and the Swiss Confederation on the other on the free movement of persons can obtain from his/her insurer a European health care insurance card that on presentation provides entitlement to care needed during temporary stays. Subject to the insurer’s permission, a person is also able in the EU, EEA and Switzerland to obtain medical care in other countries. During temporary stays in the other treaty countries, an insured person is entitled to obtain immediate essential medical care under certain conditions. Care obtained in another country under a treaty will be provided under the same terms and conditions applicable to residents of the country concerned. Medical help chargeable to the Dutch insurance system is obtainable under international agreements by family members living abroad of people who work in the Netherlands and by persons (and their family members) who live abroad on a Dutch pension but do not have health care insurance under a retirement pension in their country of residence (also refer to section 4, International Aspects). 1.7 Entitlements to care

Cover Cover under the Health Insurance Act provides for essential care. The care is checked against its demonstrable effect, cost effectiveness and the need for public financing. Upon its introduction on 1st January 2006 the Health Insurance Act will provide an equivalent level of cover that existed under health fund insurance, social health care insurance for medical care for employees, people receiving state benefits and people aged 65 and older with an income up to a certain level. It is necessary to check the insured cover against these criteria from time to time to determine whether certain types of

care need to be removed from or added to the package. The objective is to keep cover affordable now and in the years ahead. Functional entitlements The care system in the Netherlands has been organised in a way that will reduce direct government involvement in the offering of care. Within frameworks defined by law, the players in the care field have more freedom of choice, more policy scope and more decision-making latitude and also greater incentives for competition. One of the instruments used to achieve this situation is the “functional description” of the care covered by the insurance package. The functional description means the government lays down legal requirements only for what entitlements cover (i.e. the content and extent of cover) and when entitlements exist (the medical indications). It is the responsibility of the care provider to decide who provides the care and where. The insurer must include these arrangements in the care agreements that it concludes with care providers. The care agreement must also state the procedural conditions, such as requirements for obtaining permissions, referrals and prescriptions. The functional description gives insured parties, care insurers and care providers scope to tailor the insurance cover to fit the frames defined by law. This approach meets the wish of insured persons, care insurers and care providers for the government to step away from regulating everything centrally and instead to provide incentives for tailoring services in their own way. It is an approach that allows bespoke care policies. Insurance package Medical care Medical care embraces care as provided by general practitioners, medical specialists, clinical psychologists and midwives. This does not necessarily mean that the care must be provided by these persons. Other parties may provide types of care that are not reserved treatments subject to registration and title protection under the Individual Health Care Professions Act. This care includes the associated laboratory tests and nursing. It further includes advice on hereditary diseases, nonclinical haemodialysis, chronically intermittent respiratory treatment and assistance rendered by a thrombosis prevention unit. Equipment used for non-clinical haemodialysis and chronically intermittent respiratory treatment is covered by the rules applicable to medical devices. Types of care as typically offered by medical specialists may be excluded from reimbursement. An insured person may be required to pay a contribution towards a psychotherapy session or a session of primary psychological care. It is possible to stipulate that the insured person must pay a contribution up to the maximum allowed under the regulations. Mental health care (including primary psychological care) will be financed under the Health Insurance Act from 1st January 2007. This kind of care will still be covered by the Exceptional Medical Expenses Act in 2006. Primary psychological care will not yet be part of the social health care insurance schemes in 2006. Paramedical care Paramedical care includes physiotherapy, remedial therapy, speech therapy, occupational therapy and dietary advice. The entitlements of insured persons aged 18 and older to physiotherapy and remedial therapy are confined to treatment of chronic disorders. The entitlements exclude the first nine treatments for each disorder. Insured persons younger than 18 are entitled to nine treatments per year for each disorder. This entitlement may sometimes be increased by another nine treatments. Speech therapy must be provided for medical purpose with the likelihood of recovery or improvement of the speech function or speech capability. Occupational therapy must be provided with the aim of promoting and restoring the self-care and self-help of the insured person and is confined to a maximum of ten treatment hours per year. For dietary advice there is an entitlement to reimbursement of up to four hours of treatment per year. The advice must be provided by dieticians and be for medical purposes concerning nutrition and eating habits. Maternity care This concerns care for mother and baby for up to ten days after childbirth.

Pharmaceutical care Pharmaceutical care consists of medicines and foods provided for medical purposes. The medicines covered by the insurance are divided in principle into groups of medicines that are therapeutically interchangeable. The maximum reimbursement for such a group is set on the basis of the average price of the medicines in the group. An insured person who chooses a medicine that is more expensive must pay the difference. There is no reimbursement limit for a medicine that is included in the cover but is not substitutable by other medicines. This system is called the “Medicines reimbursement system”. With a view to the orchestration role that care insurers play, they are allowed to limit the reimbursable medicines to those they designate in each group. The definition of the care explicitly states that care insurers will designate medicines (subject to conditions). This was done to give extra emphasis to the role of care insurers. Medical devices The medical devices covered by the insurance are mainly those that people use at home. The content of the cover varies from personal care items (like incontinence materials and diabetes test strips) to equipment like hearing aids and orthopaedic footwear. Insured persons are entitled to efficiently functioning devices appropriate to their limitations. Under the Health Insurance Regulations, insured persons do not require the care insurer’s prior permission or guidance from a professional practitioner to obtain medical devices. Nor do the regulations contain any other procedural stipulations, like rules for the period of use of the medical device, rules for its replacement, modification or repair or rules for the quantity of devices. Care insurers are allowed to impose in their insurance regulations further conditions for obtaining medical devices (i.e. procedural conditions). However, it is not the intention for insurers to lay down in their regulations any conditions for the usage periods or quantities of medical devices (material conditions). The insurers have been given authority to set procedural conditions to allow them to deliver more care on a bespoke basis. The Health Insurance Regulations give care insurers a possibility to provide medical devices on loan or to transfer ownership to the recipient. This stipulation has not been formulated explicitly in the Health Insurance Regulations, but is one of the effectiveness criteria a care insurer is required to consider. The entitlement to medical devices does not cover reimbursement of energy costs like the use of electricity, batteries and chargers. However, the equipment is initially delivered ready for service, complete with any batteries that may be required. Energy costs of certain medical devices that do qualify for reimbursement will be explicitly stated. Mouth care Besides regular check-ups, young people under 18 have a right to fluoride treatment not more than twice a year from age six and to sealing and periodontal care. Mouth care for insured persons above 18 is confined to specialised surgical dentistry (oral surgery), the associated X-rays and dentures. People with an exceptional dental disorder, a physical or mental disability or special dental problems resulting from medical treatment are entitled under special conditions to complete dental care. Accommodation Stays in care institutions considered necessary for the provision of medical care are confined to an entitlement of 365 days. The costs after 365 days are charged to the Exceptional Medical Expenses Act (refer to section 3.7). Stays under the Health Insurance Act include entitlement to nursing and tending, but this does not necessarily have to be provided in a healthcare institution. Transport of patients Patients who are entitled to transport are carried by ambulance, taxi or private car provided that transport occurs on medical indication. The doctor treating the patient is required to issue a transport certificate. The entitlement further includes the costs of public transport in the lowest class to and from a healthcare institution. In certain cases the care insurer may agree to special modes of transport like a helicopter. An insured person is first required to pay a certain amount per 12 months for travel by public transport, taxi or private car. The costs of travel by private car are reimbursed through payment of an amount per kilometre.

The right to transport in a vehicle in which the patient is carried in the normal sitting position is confined to four situations. These are kidney dialysis, chemotherapy/radiotherapy, visually disabled people who are unable to travel unaccompanied, and wheelchair users. Reimbursement is limited to a travelling distance of 200 kilometres (one-way journey). Travel over longer distances is allowed for patients who, with the care insurer’s prior consent, receive insured treatment from a healthcare institution or care provider located farther away (within or outside the Netherlands). The insurance includes a hardship clause under which insured persons who do not fall into any of the categories described above nevertheless receive reimbursement. This may be the case, for example, if an insured person requires transport for a prolonged period of time to receive treatment for a prolonged illness or disorder. Limitation of entitlements in the event of terrorism Terrorism The Health Insurance Act limits cover for acts of terrorism to a legally defined maximum amount that makes allowance for other types of cover like building insurance. 1.8 Government grants

Grants Grants are awardable only for care or services that are due to be included in the insurance cover. The Health Insurance Act stipulates that the grants are of a temporary nature. The Health Care Insurance Board is the body that disburses grants, sometimes in association with care insurers. The grants are charged to the Health Insurance Fund. The Minister of Health, Welfare and Sport has power to impose a ceiling on each category of grants. 1.9 Funding

Cover for the costs of health insurance The costs of the health insurance are covered by the nominal premiums, income-related contributions and public funds. Nominal premium Nominal premium All insured persons aged 18 and older who have taken out health insurance pay their insurer a nominal premium. The premium is unrelated to the person’s income. Care insurers may set their own premiums. Premium levels may differ for different variants of the insurance agreements they offer, but they must be the same for everybody who chooses the same variant. So if an insurer offers health insurance under which all care is provided in kind, every member of the public who takes that particular insurance model from that insurer pays the same nominal premium. If the same insurer additionally offers health insurance under the reimbursement model, the nominal premium for that model may be different, but it must be the same for everybody who takes that model from that insurer. The only exception to the prohibition of premium differentiation is the possibility that exists at law to conclude collective insurance schemes. Under these schemes, an insurer may offer a premium discount not exceeding 10% of the base premium payable for a variant of the health insurance. Competition In two respects the nominal premium provides an incentive for providing effective care. Care insurers are able to distinguish themselves from their competitors on price. A care insurer that runs its business and purchases care effectively will be able to offer attractive premiums. Additionally, the size of the premium makes insured persons more conscious of the costs of care. The intention is to get patients who use care services to adopt a critical stance towards their price and quality. Income-related contribution Income-related contribution Besides receipts of nominal premiums, the Health Insurance Act is financed by levying an income-related contribution payable by persons under legal obligation to take out insurance. These contributions cover 50% of the total macro premium burden. People who have an obligation to conclude insurance owe the income-related contribution over income from present and past paid

employment. The Inland Revenue Service collects the contributions. Employers deduct the incomerelated contribution from the part of an employee’s salary that is subject to payroll tax. The body that administers social security payments does the same for people who receive state benefits. The contributions are remitted to the Inland Revenue Service. People who are under obligation to take out insurance but do not have income subject to payroll tax receive an assessment from the Inland Revenue Service for their income-related contributions. Employer’s allowance Allowance paid by employers to employees The Health Insurance Act imposes an obligation on employers to compensate employees for the income-related contribution if they are required by law to take out insurance. The obligation to provide this compensation also applies to certain bodies that administer social security benefits. This will be the case if people drawing state benefits owe the income-related contribution over certain types of benefits (yet to be designated). The employer’s allowance towards the costs is based on its responsibility towards its employees under civil law for such matters as costs of medical care necessitated by circumstances arising from their employment. This obligation has not been embodied in the Health Insurance Act for selfemployed persons and retired persons who are under obligation to take out insurance. Public funding Children’s premiums and other state disbursements The state makes several disbursements under the Health Insurance Act to help finance the insurance. Among other things the state provides funds to help pay for the premiums of children up to age 18. A possibility exists for the state to pay part of the costs arising from hostilities like war or terrorism. The Health Insurance Act further provides for disbursement of public funds if a care insurer is unable to meet its financial commitments. Health Insurance Fund The income-related contributions and the amounts provided by the state are paid into a fund called the Health Insurance Fund. The Health Care Insurance Board administers the fund. The principal sources of income are the income-related contributions that the Inland Revenue Service collects from insured persons. Another important source is the state’s annual contribution towards financing of the insurance of people younger than 18. The contributions the Health Care Insurance Board receives from persons living abroad who have entitlements under treaties are also deposited in the Health Insurance Fund. There is also the income that the Netherlands receives because foreign nationals with rights under treaties have entitlements in the Netherlands that are chargeable to a treaty country. Care insurers receive payments from the Health Insurance Fund to compensate for any financial disadvantage they incur through imposition of the obligation to accept anybody who is under legal obligation to take out insurance (refer to section 1.10, “Risk equalisation”). The Health Insurance Fund is also used to make payments such as grants and the amounts the Netherlands pays other countries because insured persons or people with rights under treaties have entitlements in a treaty country that are payable by the Netherlands. Financial consequences for insured persons No-claim refund The Health Insurance Act has other financial consequences for insured persons besides their incomerelated contributions and nominal premiums. Firstly, there is a no-claim refund scheme for insured persons aged 18 and older. People who use little if any care services get back part of the nominal premium they have paid. The no-claim scheme excludes the costs of care such as that provided by general practitioners and the costs of midwives and maternity care. Personal contributions Insured persons may be required to pay part of the bill personally. This will apply if they took out an in-kind policy but occasionally choose to exercise their legal right to obtain care from a care provider not contracted by their care insurer. In some cases insured persons must pay a care-linked personal contribution towards the costs of certain medicines and medical devices. Personal excess

Insured persons aged 18 and older may elect to take insurance with a personal excess. The permissible levels of the excess defined in the Health Insurance Act are €100, €200, €300, €400 and €500. In return for the excess, a care insurer is required to give the insured person a discount on the premium. This simplifies comparison of offered variants. Personal contributions that an insured person must pay, as in the cases described above, are disregarded when calculating the no-claim refunds and the person’s excess amount. 1.10 Risk equalisation

Care insurers run a financial risk when providing services covered by health insurance. The risks relate to the actual services rendered and to the costs of the administrative side of the insurance. Each year the Minister of Health, Welfare and Sport sets a separate contribution for each care provider to defray the costs of the services they provide. Care insurers receive separate compensation for the costs of providing insurance to persons younger than 18. General Under the Health Insurance Act, private insurers are responsible for running the health insurance system, within basic parameters specified by the government. The parameters are that healthcare should be accessible, affordable and of adequate quality. In a completely free health insurance market, where clients have freedom of choice and there is sufficient transparency, various tools are available to insurers to enable them to optimise their activities: risk selection, premium definition, efficient procurement of care services and operational efficiency. One of the basic principles on which such a market operates is that insurers can charge a client a premium that reflects the risks associated with the client. This is known as the equivalence principle3. Acceptance obligation No differentiation of premiums However, the Health Insurance Act does not create a completely free health insurance market; certain parameters have been imposed to ensure general access to care. For example, care insurers are legally bound to accept anyone who applies for cover and cannot charge different premiums to different groups of clients. In effect, the law has suspended the equivalence principle. Without additional mechanisms, an insurer with a relatively unhealthy client base would be at a disadvantage compared with a rival with relatively healthy clients; the insurer with the less healthy clients would have little choice but to increase premiums. Such a situation would be inconsistent with the principle of a level playing field. Care insurers have a legal obligation to accept any person who by law is required to have insurance, and this obligation rules out the risk of direct risk selection. As all insured persons with the same policy pay the same nominal premium, however, there could be an inducement to make an indirect risk selection. If individual premiums cannot be adjusted in line with clients’ risk profiles, a health insurer who takes on relatively high risk clients stands to lose out financially. Health insurers could be tempted to seek to avoid less healthy clients, despite the acceptance obligation. A system of risk equalisation mitigates the incentive to engage in this kind of indirect risk selection, which is undesirable from the point of view of the accessibility of the system. Risk equalisation The equalisation contribution minimises the cost differences for insurers resulting from the health profiles of insured persons. This contribution does not compensate for cost differences that ensue from such matters as less efficient purchasing of care by care insurers, however. It will always be necessary for a care insurer to endeavour to purchase good quality care at a reasonable price so as to keep its health insurance premiums competitive. Working of risk equalisation system The working of the risk equalisation system and the way in which it encourages care insurers to operate efficiently is based on a fairly simple principle. The care insurers will receive some of their money for providing health insurance services from a fund established for that purpose. It is called the Health Insurance Fund. The payments will be disbursed according to a general apportionment
3

The equivalence principle is that the size of the premium payable by an insured individual is related to the risk that the individual wishes to cover.

key. The key will be predefined based on the characteristics of insured persons who form an indicator of the likely costs of care. These correlations between the costs of care and the health profile of insured persons have been statistically validated. The risk equalisation model contains parameters that correct for health status differences related to age, gender and other objectively measurable client health characteristics. Objective criteria It is necessary to define objective apportionment criteria in order to distribute money from the Health Insurance Fund. The funding that care insurers will ultimately receive will depend solely on the health risks of the people they insure. The purpose of the system of weightings for each apportionment criterion is to predict the costs of each individual insured person as accurately as possible. This concerns the costs resulting from the need for care to which the person is entitled under the Health Insurance Act. Moreover, the only costs that are considered are the ones that are predictable. The weightings are determined ex-ante (forward-looking determination). Categories The model used to equalise the risks needs to make a distinction between three categories of services, i.e.: • variable hospital nursing costs and specialist care costs; • fixed costs of hospital care (i.e. the fixed costs of the stay in hospital); • the costs of other services. Ex-ante risk equalisation Assessments of risks Every care insurer that offers insurance in the Netherlands that satisfies the requirements of the Health Insurance Act receives a standard amount each year. The amount reflects the health risks of insured persons in its client base. This allowance is set at a level such that the sum of the allowance and the realistic estimate of the insurer’s nominal premium income is equal to the forecast cost of the care (“normative allowance”). Ex-post aspects of risk equalisation Retrospective correction for client numbers The contributions received by care insurers must be corrected retrospectively for the differences between estimated and actual numbers of insured persons. Health Insurance Fund disbursements should be made in advance, in principle, based on forecast client numbers grouped according to relevant characteristics of the clients. However, it is important to avoid a situation where a care insurer who acquires a lot of additional clients in the course of a year – because the insurer quickly gains a reputation of arranging care quickly and dealing with claims efficiently, for example – has to wait until the following year to receive the state’s contribution towards the cost of providing care for new clients. For that reason, the Health Insurance Act provides for the retrospective recalculation of insurers’ allowances to reflect the actual numbers of clients and their characteristics. Retrospective correction for cost parameter discrepancies Disbursements made to care insurers are adjustable retroactively to their ultimate costs in the event of extraordinary events – such as a nuclear explosion or natural disaster – that cannot be considered part of a care insurer’s normal business risk. Ex-post compensation It will not be possible immediately after introduction of the Health Insurance Act to guarantee the quality of the correlations of the costs and the characteristics of people formerly insured under the private and public systems. Ex-post methods will be used to overcome this shortcoming of ex-ante standardisation. The distribution of funds over the care insurers will be adjusted retroactively, based on the costs they actually incur. The need for temporary ex-post compensation mechanisms is all the greater because the introduction of the Health Insurance Act is linked to a wider programme of market mechanisms being rolled out in the healthcare sector. As part of this shift, changes are occurring in the allocation of the costs of providing healthcare provision. One such change is the introduction of ‘Diagnosis Treatment Combinations’, under which hospitals and medical specialists are paid for the care they provide in a way that better reflects the underlying costs. Compensation mechanisms

The ex-post compensation mechanisms are described below. Compensation for high costs High-cost compensation will help even out cost differences resulting from an unequal distribution of extremely high claims of insured parties over care insurers. The complexity of the risk equalisation system will increase if an attempt is made beforehand to identify individual bad risks and compensate for them. Generic equalisation Generic equalisation is a way of correcting for possible shortcomings in the distributive working of the model. Retrospective calculation Retrospective calculation is used to link the size of the financial risk to the scope that care insurers have for influencing their costs. The need for ex-post compensation mechanisms will decrease as better information becomes available for adjusting ex-ante standardisation to the cost patterns of all insured persons for the newstyle funding of care services. The government intends to give priority to dismantling generic equalisation. Standard calculation premium The equalisation allowances disbursed from the Health Insurance Fund will not be sufficient to cover the cost of providing care to clients. Besides this contribution, care insurers will charge their insured persons a nominal premium. The risk equalisation system ensures that everyone pays an identical premium (‘calculation premium’). This premium represents the average amount a care insurer should need to charge in order to meet all its clients’ claims. The object of risk equalisation is to compensate for differences between care insurers in terms of the health risks of their client bases. Costs of operating the system Besides the costs of providing insured services, a care insurer incurs expenses for operating the insurance system. The government does not in principle make corrections to reflect efficiency differences with the aim of establishing an equal baseline position (efficiency can be influenced by such measures as economies of scale or the outsourcing of administrative records and the procurement of care). The operating expenses are disregarded in the risk equalisation system. However, for insured persons below age 18, insurers have to bear not only the costs of care (for which they receive an equalisation contribution), but also the operating expenses (for keeping records and procuring care). A care insurer is unable to finance the operating expenses through a marl-up on premiums for people younger than 18. To rectify this situation the care insurers receive a separate nominal payment from the Health Insurance Fund. 1.11 Management and supervision

Tasks of the Health Care Insurance Board The Health Care Insurance Board has been designated under the Health Insurance Act to oversee the day-to-day running of the health insurance schemes. The board has tasks and powers to: • supervise management of the package of cover by promoting unambiguous interpretation of the insured cover and issuing guidelines to care providers. The board reports to the minister on his request about proposed policy concerning the nature, content and scale of the package. The board also alerts the minister on request and on its own initiative about factual developments in the medical field that could necessitate altering the package; • provide guidance to care providers, care insurers and members of the public about the nature, content and extent of the package; • promote harmonisation in the way the Health Insurance Act and Exceptional Medical Expenses Act are implemented and in the execution of policy in other areas of public health and social security; • manage the Health Insurance Fund (the fund from which care insurers receive equalisation disbursements) and the General Exceptional Medical Expenses Fund under the Exceptional Medical Expenses Act; • award grants and manage expenditure on subsidised care; • perform tasks like acting as a collection and accounting office for financial settlement of services rendered to insured persons in other countries, people living abroad with entitlement

• •

under treaties ratified by the Netherlands and foreign nationals in the Netherlands with treaty rights; carry out the equalisation system; manage the tax that conscientious objectors pay in place of insurance contributions.

Regulation The health insurance system is subject to regulation in a number of fields. The regulation extends to the way care insurers act in financial markets, the way they carry out the provisions of the Health Insurance Act, the way markets develop, the competition that exists among care insurers and care providers and the regulation of the quality of care. Dutch Central Bank The insurers that render services under the Health Insurance Act are private companies. Therefore, they are subject to the laws governing supervision of private insurers laid down in the Insurance Supervision Act 1993. This supervision focuses on whether the insurer’s financial position is sufficiently strong to cover its commitments and whether its business processes are organised in a way that assures the company’s continuity so that it can continue meeting its commitments in the future. The Dutch Central Bank, DNB, is the body that oversees compliance with these requirements. An insurance company with its registered office in another EU member state is subject to the supervision of the regulatory authority in its own country. Financial Markets Authority Private insurance companies are further subject to supervision to make sure they provide financial services properly. This supervision extends to care insurers as well as insurance agents and other distribution channels. The Financial Markets Authority, AFM, is the regulator charged with conducting this supervision. AFM keeps a watch on compliance with the basic requirements that financial market players must satisfy to be deemed a responsible distribution channel for financial products. Key questions are whether the insurer informs its insured persons properly about their options and about the premiums payable for the different insurance variants. The regulator also has the power to monitor securities transactions with a view to assuring scrupulous investment of funds by organisations like care insurers. Supervisory Board for Health Care Insurance The Minister of Health, Welfare and Sport is responsible for making sure that the Health Insurance Act works properly. One of the ways in which he fulfils this responsibility is by sending the two houses of parliament information about how the Act is protecting public interests. His accountability mainly concerns compliance with the acceptance obligation, the prohibition of premium differentiation, the obligation to provide care and the question of whether the insurance policy – the private law agreement between care insurer and insured party – provides no more and no less insurance than required by law. Other relevant accountability information includes a statement of the insured client base in connection with equalisation arrangements and the question of whether the care insurer is acting within the law with regard to collective contracts. The choice for private insurance that assigns greater responsibilities to insurers who are allowed to make a profit makes it inappropriate for the government to supervise the effectiveness of the way health insurance is operated. Therefore, the main objective in overseeing lawful performance of the new-style health insurance is for the government to ascertain whether the care insurer is fulfilling its obligation to provided insured persons with the services to which they are entitled under the Health Insurance Act. The regulator that exercises this supervision, the Supervisory Board for Health Care Insurance, CTZ, has various duties and powers under which it: • reports to the minister on whether the Health Insurance Act is being carried out in accordance with the law; • reports on the practicability, effectiveness and efficiency of proposed policy concerning performance of its regulatory role; • investigates care insurers at the request of the Health Care Insurance Board; • has a possibility to impose rules for audits by care insurers and for the content and structure of auditors’ reports. Netherlands Care Authority

Removing barriers that impede market forces and “repairing” markets that do not yet satisfy market forces criteria are important tasks and responsibilities for the government. The objective is to strengthen the insured person’s position, remove market entry obstacles and create greater transparency. The overarching goal is to promote transparency in the care market in a way that allows members of the public to weigh up properly the choices they must make under the Health Insurance Act. To ensure the system works properly it is imperative for insured persons to be able to “vote with their feet”. With this in mind the government will create the new Netherlands Care Authority (NZa) to bring about this situation. The task will be defined in the Healthcare Market Organisation Act (refer to section 5.1). When the Act comes into force, the Supervisory Board for Health Care Insurance will be absorbed into the Netherlands Care Authority and its rights and obligations will transfer to NZa. Netherlands Competition Authority The Competition Act regulates the general supervision of competition. Care insurers and care providers are among those subject to the provisions of the Act. The Netherlands Competition Authority (NMa) has been charged with making sure that care insurers comply with the Competition Act. Supervision of quality of care The Health Care Inspectorate (IGZ) has been entrusted with overseeing the quality of public health and the existence of regulations and their observance by care providers. The inspectorate monitors the quality delivered by medical professionals as regards matters like competence to perform medical procedures. It also keeps a watch on fulfilment of quality criteria for effectively and efficiently delivering responsible care of a good standard that meets the patient’s needs. 1.12 Disputes

General An insuring party (policyholder) or insured person who disagrees with a decision by a care insurer concerning the provision of insured services has the right to require the care insurer to reconsider its decision. If the care insurer fails to respond within a reasonable period of time, or fails to address or address properly the objections that have been raised, the insured person may take the case to a court of law with jurisdiction, or may place the dispute before an independent disputes arbitrator. Besides a dispute about the way the law is being carried out, an insured person may have a complaint about such matters as how the insurer treats him or about the resolution of a question about which the insured person and insurer held different opinions. The procedures for disputes and for complaints differ. Civil courts Health insurance is established under a private agreement, so in principle a dispute must be settled under civil law. This principle is embedded in article 112, paragraph 1, of the Dutch Constitution, which states that the judiciary must rule in disputes concerning civil and personal rights. This means the sub-district courts or district courts and, on appeal, the court of justice. In the final instance an appeal in cassation may be lodged with the Supreme Court. Independent resolution of disputes Proceedings before a court of law can take considerable time and can be expensive. Therefore, the care insurer and the insuring party or insured person may jointly decide to refrain from approaching the civil courts and instead place their dispute before an impartial third party. The Health Insurance Act stipulates that a care insurer must make it possible for its policyholders and insured persons to submit disputes about the performance of health insurance to an independent body. Health Insurance Disputes Board The health insurers have established a separate legal person for this purpose. It is called the Health Insurance Disputes Board. This procedure for resolving disputes is subject to the Regulations of the Health Insurance Disputes Board. The regulations require payment of a fee to avoid cases being submitted to the board unnecessarily. The fee is refunded to the insured person or policyholder if its case is upheld in full. The board’s judgment is a binding recommendation. Advice from the Health Care Insurance Board

If a dispute concerns care or care-related services (like nursing, tending, stays in healthcare institutions and transportation) or the charges payable for them, the board must obtain the advice of the Health Care Insurance Board before ruling on the dispute. Health Insurance Ombudsman The Health Insurance Ombudsman hears any complaints about health insurance and deals with complaints and disputes about supplementary insurances. The ombudsman was established in 1996 by Zorgverzekeraars Nederland, the association of care insurers in the Netherlands. The ombudsman may also mediate in lodged disputes that arise when a care insurer takes a decision apparently without due reconsideration. The ombudsman mediates between an insured person and his/her care insurer or insurance agent in the event of complaints about health insurance. The ombudsman endeavours to reconcile the parties by convincing them of the reasonableness or unreasonableness of their respective positions. The parties are treated as equals as a matter of principle.

2.

Health Care Allowance Act

2.1 Background Affordable health insurance The Health Insurance Act establishes a single regime of premiums for all insured persons. Besides an income-related contribution, which the Inland Revenue Service collects, insured persons owe their care insurer a fixed premium called the nominal premium. The care insurer sets the size of the nominal premium without reference to a person’s income. The government decided to introduce health care allowances to avoid a situation where the level of premiums impeded access to care. Health care allowance Entitlement to the health care allowance depends on a person’s income. The allowance exists to help a person pay the costs of the nominal premium. The health care allowance is not determined through reference to the nominal premium a person actually pays, but by taking the average of premiums offered by insurers under care policies. This approach was adopted to promote competition between care insurers and to ensure that members of the public consider the size of the nominal premium when choosing an insurer. The Inland Revenue Service administers the Health Care Allowance Act. An application for the allowance must be accompanied by an estimate of the income of the applicant and (if applicable) his/her partner in the coming year. This estimate is used to pay out a monthly advance on the health care allowance, starting in December prior to the year over which the allowance is due. Most people will thus receive the allowance slightly earlier than the time they must start paying the nominal premium to their care insurer. People may authorise the Inland Revenue Service to pay the health care allowance directly to the care provider to allow immediate set-off against the nominal premium they owe. Subsequently, the Inland Revenue Service determines the final amount of the health care allowance – based on data like the person’s income tax returns – after which a settlement occurs if a person has received too much or too little in the way of allowances. People qualify for the health care allowance only if they have fulfilled their legal obligation to take out health insurance. The right to a health care allowance is forfeited if a person’s partner has failed to meet the insurance obligation. Persons who live abroad and are subject to the obligation to take out insurance also qualify for the health care allowance. The same applies to people who live abroad and are entitled to medical care chargeable to Dutch insurance under international agreements rather than Dutch laws. 2.2 Purpose of the Act The Health Care Allowance Act provides a contribution towards the costs of health insurance premiums. It is intended for people for whom the premium would be disproportionately high in relation to their income. Eligible people with rights under treaties also receive an allowance towards the amounts they owe. The Health Care Allowance Act provides a right to financial assistance from the state. The level depends on a person’s means. This makes the health care allowance an incomerelated scheme subject to the General Income-linked Regulations Act. The definitions of terms used in this Act, like partner and means testing, also apply under the Health Care Allowance Act. 2.3 Persons with legal entitlements People covered by the Health Insurance Act The Health Care Allowance Act applies to people who have fulfilled their legal obligation under the Health Insurance Act to take out insurance (refer to section 1.3) and to people living outside the Netherlands who have rights under treaties and have registered with the Health Care Insurance Board. Everybody with health insurance is entitled to a health care allowance from the first day of the calendar month after reaching age 18 if their premiums (or the payments owed by people with treaty rights) are disproportionately high compared with their income. Children under 18 who live at home have an independent right to a health care allowance. 2.4 Right to the health care allowance Health care allowance Norm for standard premium

A person with insurance under the Health Insurance Act qualifies for a health care allowance if the normative costs determined for his/her health insurance agreement (called the “normative premium” in the Health Care Allowance Act) are less than the estimated average premium costs (called the “standard premium” in the Care Allowances Act). The health care allowance is equal to the difference between the two types of costs. The Allowances department of the Inland Revenue Service checks whether a person who applies for an allowance has actually taken out health insurance. Percentage of the health care allowance The normative costs of health insurance for an insured person with a partner have been set at 5% of the threshold income defined in the Health Care Allowance Act plus 5% of the means-tested income in excess of the threshold income. The normative costs of health insurance for an insured person without a partner have been set at 3.5% of the threshold income plus 5% of the means-tested income in excess of the threshold income. These percentages are adjustable by general administrative order. The minister of Finance and the Minister of Social Affairs and Employment jointly determine these percentages. A person with personal assets does not lose the right to the allowance. Determination of entitlement to the allowance The Allowances department of the Inland Revenue Service determines whether a person is entitled to a health care allowance. It does this for each calendar month separately. Therefore, any change in a person’s income immediately affects the size of the health care allowance. This makes it important for people to inform the Inland Revenue Service immediately of any changes relevant to the allowance. The advances on the allowance will be adjusted immediately. This system is designed to avoid differences between the advanced and definitively determined allowances (refer to section 2.5). Tax relief Besides any entitlements to compensation for the costs of taking out health insurance, insured persons have a right to tax relief under a scheme for exceptional expenses. Subject to the conditions defined in fiscal legislation, people may claim tax relief on the costs they incur for health care insurance. These costs include premiums actually paid insofar as they exceed the amount a person receives in health care allowances. However, the fiscal regime is wider and embraces more care costs than just the insurance premium. But by definition a person can claim only some of the costs against tax. Tax relief is claimable under arrangements that exist for exceptional expenses if a person entitled to tax relief has insufficient income to take advantage of the relief. Health care allowances in an international context Health care allowances for insured persons living abroad The health care allowance is exportable under various treaties the Netherlands has signed. These are the Council Regulation, the EEA agreement and the agreement between the European Community and its member states on the one hand and the Swiss Confederation on the other on the free movement of persons, plus various bilateral social security agreements the Netherlands has concluded with other countries. Consequently, people who live abroad and are subject to Dutch law may be eligible for a health care allowance on exactly the same conditions as if living in the Netherlands. Health care allowances for people with rights under treaties Some other categories of people are entitled to medical care chargeable to Dutch insurance under international agreements rather than Dutch laws. This right applies to family members of a person who works in the Netherlands if they are residents of a “treaty country”. The right further extends to people with a Dutch retirement pension or long-term social security benefits who would be insured under the Health Insurance Act were they to reside in the Netherlands. The right also covers their family members. These people qualify for the health care allowance on the same conditions as if living in the Netherlands. 2.5 Implementation Allowances department of the Inland Revenue Service. Implementation of these arrangements has been entrusted to the Allowances department of the Inland Revenue Service. Provided that a person applies on time, the department will pay out the health care allowance in twelve monthly instalments. The first instalment is receivable in December prior to the year for which the health care allowance has been calculated. Consequently, people eligible for the allowance will receive it before the date they start paying their health insurance premiums. An application for the allowance must be accompanied by an estimate of the income of the

applicant and (if applicable) his/her partner in the coming year. This estimate is used to pay out a monthly advance on the health care allowance. The Allowances department of the Inland Revenue Service subsequently refers to data like a person’s income tax returns to determine the definitive amount of the health care allowance. If necessary a settlement occurs if a person has received too much or too little in the way of allowances. 2.6 Funding Means testing principle Through the health care allowance, the government provides compensation for some of the premium costs that people with a low income must pay for their health insurance. This approach is designed to create a care system that evenly distributes the financial burden. Everybody makes a contribution towards paying for the system according to the means testing principle. A person’s means determines how much they receive in the form of allowances. Means testing includes the income of the applicant and (if applicable) that of his/her partner. Means testing Under the General Income-Linked Regulations Act, a “reference income” is used to determine a person’s means. The income of the applicant and (if applicable) the income his/her partner are examined for this purpose. Insured person (with a partner) Only one-person or two-person households exist for the purposes of the health care allowance. This is an important distinction when determining the level of financial compensation that will be provided. The definition of a partner given in Section 3 of the General Income-Linked Regulations Act is applied to determine whether a two-person household exists. An insured person and insured partner will jointly have a single entitlement (right). So there will be one applicant for the health care allowance. An insured person loses the right to a health care allowance if he/she has a partner who has failed to meet the legal obligation to take out health insurance. A notional income is used to calculate the health care allowance due to an insured person without personal income. 2.7 Reference income A “reference income” is used to determine what means people have at their disposal for the purpose of applying the provisions of the General Income-Linked Regulations Act. The point of departure is the income of the applicant and (if applicable) the income of his/her partner. The reference income for calculating the health care allowance is the joint income in the base year within the meaning of the Income Tax Act 2001. The base year is the calendar year over which the health care allowance is payable. The joint income will be printed on the tax assessment form received by insured persons who must file income tax returns. In principle, the reference income is exactly the same as a person’s taxable income. If a back-tax assessment is imposed (because of a higher joint income than declared) subsequent to the tax assessment, it will automatically result in a higher reference income. To ensure that the health care allowance reflects the applicant’s current income, the Inland Revenue Service bases its calculations on a person’s income in the year in which the allowance will be receivable. Threshold income A “threshold income” has been built into the health care allowance system to apply the principle that everybody should personally pay some of the costs of care. The threshold income has been defined in the Health Care Allowance Act. It is a mechanism for ensuring that nobody gets back all or nearly all of the costs of their health insurance premiums. The level of the threshold income has been set at a percentage of the statutory minimum wage for people aged 23. This amount is reduced by the employee’s contributions under the Unemployment Benefits Act and Sickness Benefits Act and increased by the allowance payable by an employer towards the income-related contributions owed by an employee who is legally bound to take out health insurance. 2.8 Calculation of health care allowance Amount of the allowance An insured person qualifies for a health care allowance if his/her normative costs of health insurance premiums (the normative premium) are less than the estimated average premium costs (standard premium). The health care allowance is equal to the difference between the two types of costs.

Normative premium The normative premium is the premium calculated for health insurance in the base year, based on the threshold income and reference income of the insured person. The normative premium is a percentage of the threshold income, plus a percentage of the reference income insofar as the reference income exceeds the threshold income. The joint reference income is used for an insured person with an insured partner. Standard premium A standard premium is the estimated average nominal premium for health insurance. This will be reduced by the estimated average amount that an insured person gets back in the form of no-claim refunds if he/she makes little if any use of care services. The standard premium used to calculate the health care allowance is laid down by ministerial regulation. The size of the standard premium is the average of the nominal premiums that insured persons are likely to pay for their health insurance in any particular year. The point of departure is the average of the nominal premiums for the health insurance estimated by the Netherlands Bureau for Economic Policy Analysis (CPB) in the year prior to the base year. In April (of the base year) a calculation is made to determine whether the estimated average of the nominal premiums in the preceding year differs from the actual average. If there is a variance of €25 or more from the originally estimated premium costs, the standard premium for that year that was used to determine the health care allowance will be adjusted immediately by ministerial regulation. The Minister of Health, Welfare and Sport will inform the Allowances department of the Inland Revenue Service of the new standard premium. If this situation arises, the decisions concerning the awarding of health care allowances by the Inland Revenue Service will be amended (as of 1st July) and the higher or lower health care allowance will be paid out in the same year. 2.9 Management and supervision

Checks by the Inland Revenue Service The Allowances department of the Inland Revenue Service conducts checks that include whether a person who wants a health care allowance has taken out health insurance or has registered with the Health Care Insurance Board as a person with treaty entitlements. The purpose of the checks is to make sure that persons who apply for health care allowances are entitled to them. The department uses data that insurers and the Health Care Insurance Board are required to provide by law under the Health Insurance Act. After the base year, the Inland Revenue Service automatically checks the details of the applicant (and if applicable those of the partner) using the available information and determines definitively the allowance due. The details used for this purpose are income, household composition and the holding of insurance or registration as a person with treaty entitlements. 2.10 Disputes (objections and appeals)

General Administrative Law Act The Allowances department of the Inland Revenue Service implements the Health Care Allowance Act. Implementation of the Act is governed by the rules of the General Income-Linked Regulations Act. The latter Act regulates possibilities for objections and appeals against decisions on health care allowances (i.e. the awarding and size of the allowance). Decisions concerning health care allowances are taken in the form of an order issued by an administrative body. Therefore, the decisions are subject to the rules embodied in the General Administrative Law Act. Different rules have been framed for the periods allowed for lodging an objection or appeal. In principle, any person who disagrees with a decision by the Allowances department of the Inland Revenue Service concerning the awarding or size of a health care allowance has the right to file an objection with the department. The department will rule on the objection. However, a person may subsequently lodge an objection against this decision with a court of law that has jurisdiction to hear the dispute.

3. 3.1

The Exceptional Medical Expenses Act Background

In 1962, Health Minister Gerard Veldkamp put forward a plan for an insurance scheme to cover the whole population against major medical risks. This scheme was intended to provide for the considerable financial consequences of serious long-term sicknesses or disorders, in particular the cost of caring for disabled people with severe congenital physical or mental disorders and psychiatric patients requiring long-term nursing and care. The risk of incurring such costs is in fact not particularly great, but virtually nobody that does incur them can bear such costs themselves. Hence the term “exceptional medical expenses”. The Exceptional Medical Expenses Act became law on 14 December 1967 (Bulletin of Acts, Orders and Decrees 1967, 655) and came into effect in stages, starting on 1 January 1968. 3.2 Nature of the scheme

Insurance required by law The Act makes insurance a legal requirement: everyone who meets the criteria spelled out in the legislation is automatically insured and consequently obliged to pay the statutory contribution, irrespective of whether the individual wants to make use of the benefits provided by the legislation. People who object to insurance as a question of personal principle (‘conscientious objectors’) may obtain exemption from the insurance obligations under the Act. Instead, they pay amounts under income tax or payroll tax to replace the insurance premiums. 3.3 Insured persons

Persons insured under the Act The Exceptional Medical Expenses Act is a national insurance scheme. Generally speaking this means that the following persons are insured: • residents of the Netherlands. Residents are people who live in the Netherlands. This primarily means people who live on Dutch territory, but people living elsewhere can sometimes qualify as residents of the Netherlands. In various cases, the courts have ruled that someone living beyond the national borders can be considered to be a resident of the Netherlands in certain circumstances. Generally speaking, a person’s place of residence depends on the community into which he or she is integrated. So, for example, someone who can demonstrate that his or her economic and social ties are primarily with the Netherlands may be considered resident in the Netherlands. • non-residents who are employed in and therefore liable for payroll tax in the Netherlands. This category covers primarily cross-border commuters and expatriates. Under these basic rules, it makes no difference whether a person is a Dutch national or not. However, someone who is not a Dutch national must be legally resident in the Netherlands to qualify for cover under the Act. There are a number of exceptions to the basic rules set out above. On the one hand, some people are covered even though they are residents of other countries. On the other, some people who are residents of the Netherlands are not actually covered. These exceptions are explained in the 1999 Decree regulating Admission to the National Insurance Schemes. Among those who are insured are Dutch civil servants and their family members who are stationed in foreign countries. The insurance of children under the Act is not pegged to the insurance of the parents. A child’s place of residence is determined by his or her own circumstances. The Act also differs from other social insurance schemes in that there is no age limit on the insurance obligation. Important considerations for application of the Exceptional Medical Expenses Act are the arrangements that exist under the Council Regulation, the EEA agreement, the agreement between the European Community and its member states on the one hand and the Swiss Confederation on the other on the free movement of persons and bilateral social security agreements that the Netherlands has concluded with other countries and include arrangements for the provision of medical care (refer to chapter 4).

3.4

Management, administration and contracts between insurers and health care providers

Management and administration The health insurers operate the Exceptional Medical Expenses Act scheme on their clients’ behalf. The bodies that implement the provisions of the Act delegate various responsibilities – in particular the contracting of health care providers, the collection of patient contributions and the organisation of regional consultations – to regional health care offices. These offices receive a budget to pay for their running costs. The Health Care Insurance Board sets the budget and it is subject to the approval of the Minister of Health, Welfare and Sport. Each health care office carries out tasks in a particular region for the implementing bodies. The health care office, which receives its data from the implementing bodies, keeps records of the monthly accounts and advance payments for each institution. Where certain health care entitlements are concerned, it has been arranged that, as far as possible, an institution only has to deal with one implementing body for both financial settlement and medical supervision. To this end, the implementing bodies have handed responsibility for administration and payments to a central administration office (“CAK-BZ”), which makes payments to the relevant institutions. Contracts between insurers and health care providers Contracts The bodies that implement the Exceptional Medical Expenses Act have a “duty of care” in that they are required to ensure that their clients can obtain the health care to which they are entitled To this end, the bodies or the health care offices they engage enter into contracts with health care providers and institutions. These contacts regulate the volumes of health care services that will be provided, the charges and other such matters. 3.5 Registration and validation of health care entitlements

Registration Under the Exceptional Medical Expenses Act, a person must be registered with one of the implementing bodies to be entitled to health care. A care insurer that has registered with the Health Care Insurance Board to carry out the Act’s provisions represents its insured clients as an implementing body under the Act. Consequently, people who are insured under the Act and have taken out insurance with a care insurer are registered automatically for entitlements under the Act. Persons insured under the Act who for any reason do not hold health insurance (like members of the armed forces) are able to sign up with a care insurer for cover confined to the Act’s provisions. The same applies to people covered by the Act who live outside the Netherlands. Registration is for one calendar year at a time and is renewed at the end of each year unless the individual concerned gives written notice in good time that he or she does not wish to renew. A health insurance fund may require a period of notice of up to two months. Insured persons who end their health insurance to take out cover with a different care insurer have their registrations for entitlements under the Act transferred to their new insurer. Validation of health care entitlements Waiting times Someone from abroad who settles in the Netherlands and thus comes within the scope of the Exceptional Medical Expenses Act is not actually entitled to certain types of in-patient health care covered by the scheme for a period of up to twelve months from the time that he or she takes up residence. This rule applies if the care in question was already indicated when the person took up residence in the Netherlands or if his/her medical condition at that time was such that it would have been clear that the care would be needed within six months. The waiting period applies in relation to expensive forms of care, such as nursing-home care. A person to whom this rule applies is not necessarily unable to obtain care, but he or she cannot claim for the cost of such care through the Act’s provisions. CIZ indications Before a person can qualify for care under the Exceptional Medical Expenses Act, it is necessary to establish whether care is really required and, if so, what type of care and how much care is needed. This ‘indication’ is issued by an organisation called CIZ. CIZ is an independent organisation

responsible for determining impartially, objectively and thoroughly what care is required. The client then has the choice of receiving his/her entitlement as care in kind, or in the form of a personal care budget; a combination of the two is also possible. Care in kind Care in kind is the provision of indicated care directly to the client by a health care provider (e.g. a home care organisation) that is contracted to provide such care. The care provider arranges the provision of care and its administration in consultation with the patient. A person who is entitled to care does not have to obtain all his/her care from the same provider; he or she may receive some of his/her care in kind from one provider and some (also in kind) from another provider. Personal care budget A person who is entitled to care under the Exceptional Medical Expenses Act can opt not to take care in kind, but to receive a personal care budget. In principle, anyone who requires care under the Act for more than three months can qualify for such a budget. The budget is a sum of money awarded to the client to enable him/her to purchase care independently. However, the budgets are available only for certain functional forms of care, such as nursing, general care and guidance; they are not available for treatment or institutional accommodation (see below under entitlements). The latter forms of care are always made available in kind. Someone who has been awarded a budget is free to choose when and from whom they obtain care. The budget provides freedom of choice alongside services a client prefers to receive in kind. Many budget recipients like receiving assistance from a particular carer whom they choose themselves and who does not change from day to day. In many cases the carer will be a personal acquaintance, such as a neighbour or friend, but the client is also free to use the services of a health care organisation. In other words, the budget gives clients considerable freedom of choice. Obligations are also attached to the budget. Requirements include procurement of a responsible standard of care and the discharge of regular financial accountability to the care office. Care providers Most care under the Exceptional Medical Expenses Act is provided by institutions. Before it is allowed to provide care under the Act an institution must have received approval and concluded an agreement with a body that implements the provisions of the Act. 3.6 Care under the Act in other countries

Under the Exceptional Medical Expenses Act, an insured person is generally required to use care providers contracted by the body responsible for implementing the Act’s provisions. The implementing body may contract care providers in the Netherlands or in other countries. This allows people to receive care abroad insofar as it has been contracted by the implementing body. But the Exceptional Medical Expenses Act also gives an insured person the freedom to approach and uncontracted care provider in the Netherlands or another country. However, the prior consent of the implementing body is sometimes required. People can additionally obtain care outside the Netherlands under international social security agreements (also refer to chapter 4, “International aspects”). 3.7 Care entitlements under the Act

Entitlements The Act and related legislation govern the entitlements to care that exist under the Exceptional Medical Expenses Act. Procedural rules have been laid down under this legislation for such matters as invoking certain rights to care or obtaining the implementing body’s prior permission. Assistance is available only if the CIZ has decided that the insured person is in need of a particular type of care. Personal contribution For most types of care under the Act, clients above the age of eighteen are required to make personal contributions towards the costs. The size of this contribution depends partly on the client’s taxable income and domestic circumstances (whether he or she lives at home or in an institution). Other relevant factors include whether the client is older than sixty-five and whether he or she is married or cohabits. If the client is receiving a personal care budget, his/her personal contribution is deducted directly from the budget. An insured person who pays a personal contribution towards in-kind care will either receive a bill or the amount owed will be set off against state allowances like social assistance

benefits. The detailed rules are laid down in the Decree on Personal Contributions to the Cost of Care and the associated Regulations on Personal Contributions to the Cost of Care. Function-based entitlements The entitlements that exist under the Exceptional Medical Expenses Act have been defined in terms of functions. The focus is now on the needs of people entitled to care rather than on the available supply of care. This change in emphasis is expected to pave the way for providing customised care. The need to switch from a supply-side approach to a demand-side one came about as a result of a changing society in which people increasingly voice their wishes and want to organise their lives in the way they see fit. Another basic principle of the Exceptional Medical Expenses Act is that people should continue to live at home for as long as possible. They can receive care either in the home or at a healthcare institution. Functions Seven broadly-defined functions create considerable freedom for arranging indicated care in consultation with a care provider. They are: 1. Domestic help: e.g. tidying up, cleaning, preparing meals. 2. Personal care: e.g. help with taking a shower, bed baths, dressing, shaving, skin care, going to the toilet, eating and drinking. 3. Nursing: e.g. dressing wounds, administering medication, giving injections, advising on how to cope with illness, showing clients how to self-inject. 4. Supportive guidance: helping the client organise his/her day and manage his/her life better, as well as day-care or provision of daytime activities, or helping the client to look after his/her own household. 5. Activating guidance: e.g. talking to the client to help him/her modify his/her behaviour or learn new forms of behaviour in cases where behavioural or psychological problems exist. 6. Treatment: e.g. care in connection with an ailment, e.g. rehabilitation following a stroke. 7. Accommodation: some people are not capable of living independent lives, but require, for example, sheltered housing or continuous supervision in connection with serious absent-mindedness. In some cases, a client’s care requirements may be too great to address in a home environment, making admission to an institution necessary. Care is provided in the form of ‘products’. So, for example, home care, psychiatric care and admission to a residential care home, nursing home or institution for people with physical or mental disabilities are all Exceptional Medical Expenses Act products. A product consists of one or more functionally defined forms of care. Illustration: Mr B has suffered a brain haemorrhage. He is convalescing and is temporarily in need of nursing and general care. His indication therefore covers four functionally defined forms of care: “general care”, “nursing”, “treatment” and “accommodation”. The combination of these functions is delivered by admission to a nursing home. Besides the care functions, people are entitled to such facilities as nursing articles, hospital care after one year, rehabilitation (after one year), pre-natal care, examination of certain hereditary metabolic diseases and vaccinations under the national vaccination programme. 3.8 Government grants Subsidies The basic provisions for awarding subsidies chargeable to the General Exceptional Medical Expenses Fund have been embodied in the Exceptional Medical Expenses Act as a result of introduction of the Health Insurance Act on 1st January 2006. As with the Health Insurance Act, the number of purposes for which the government may provide subsidies is limited. In principle, a subsidy may be provided only for care or other services that are likely to be brought into the package of insurable care. For that reason, the government decided that the subsidy should be of a temporary nature. In contrast with the Health Insurance Act, the Exceptional Medical Expenses Act defines two other purposes for which subsidies may be given. They are a personalised healthcare budget and the termination of pregnancies by abortion clinics. The principle remains that pregnancy terminations are not financed through premium revenues but from tax revenues that the government allocates to the Exceptional Medical Expenses Fund.

The Minister of Health, Welfare and Sport has the power to set a ceiling for each category of subsidies. The Health Care Insurance Board may lay down supplementary rules. These include, for example, an elaboration of the rules issued by ministerial decision if such is necessary to regulate the practical side of awarding subsidies. These supplementary rules are subject to the minister’s approval. Approval is not always possible on account of conflicts with written or unwritten law. Similarly, the minister may occasionally withhold approval because the rules are counter to the general interests of public health. 3.9 Funding

Covering of costs of care provided under the Exceptional Medical Expenses Act The Exceptional Medical Expenses Act insurance scheme is funded by premiums paid by the people whom the scheme covers, by the State Subsidy and by personal contributions from care recipients. Contributions due under the Act are collected through the income and payroll tax systems, along with the contributions for the other national insurance schemes. Every year the government sets the contribution payable under the Act as a percentage of taxable income in the lowest two income tax bands. The premium percentage in 2005 was 13.45%. People in paid employment have their contributions deducted at source by their employers, who pay the money to the tax authorities. People who are not in paid employment but are liable to pay income tax and social insurance contributions receive tax assessments that include their contributions and thus pay their contributions straight to the tax authorities. Insured persons below age 15 and those older than 15 without their own taxable income do not owe any premiums. An insured party pays the excess for using certain facilities like admission to a nursing home. The excess amounts payable are usually linked to the level of a person’s income. The Inland Revenue Service remits collected premiums to the Health Care Insurance Board that deposits the money in the Exceptional Medical Expenses Fund. The board manages and administers the fund. The implementing bodies that collect excess amounts from insured persons similarly remit this money to the fund. Each year central government pays an amount into the Exceptional Medical Expenses Fund to compensate for the financial effects caused by the modified levying system that accompanied introduction of the Income Tax Act 2001. The government adjusts this payment from year to year. 3.10 Management and supervision Responsibilities of the Health Care Insurance Board The tasks of the board under the Exceptional Medical Expenses Act are to: • promote lawful and effective implementation of the Exceptional Medical Expenses Act by care insurers and care facilitators and the possibility to set policy rules for implementing the Act’s provisions; • provide guidance to care providers, care insurers and members of the public about the nature, content and extent of the insurance package; • report to the minister on request about proposed policy for the nature, content and extent of care entitlements; • alert the minister on request and on its own initiative to factual developments that could necessitate altering the package; • award temporary subsidies; • report to the minister on request and on its own initiative about the level of funds that need to be available in the Exceptional Medical Expenses Fund and in the form of premiums for the Exceptional Medical Expenses Act. Responsibilities of the Health Care Insurance Board The board is responsible for overseeing lawful and effective implementation of the Exceptional Medical Expenses Act and the Health Insurance Act. More detailed information about the board’s managerial and supervisory tasks in the coming years can be found in section 1.11, and in section 5.1 that deals with the Healthcare (Market Conditions) Act. 3.11 Disputes

Complaints Clients with complaints about how they have been treated by an Exceptional Medical Expenses Act implementing body must first lodge their complaint with the body in question. Under the General Administrative Law Act, an Exceptional Medical Expenses Act implementing body has an obligation to deal satisfactorily with such complaints. If the complainant is not satisfied with the response, he or she can then submit a complaint to the National Ombudsman. The National Ombudsman assesses complaints on the basis of accepted standards of conduct. The Ombudsman considers whether the implementing body has acted in breach of the statutory code of conduct and whether its actions were reasonable, equitable, justified and duly careful. An aggrieved client also has the option of submitting a complaint about an implementing body to the Health Care Insurance Board. The board can then take action if appropriate, for example by issuing directives to implementing bodies. In the event of several complaints about the same subject, the board may inform the Minister about the problems. This may in turn give grounds for policy changes or amendments to legislation and regulation. Objections and appeals An insured person has the right to lodge an objection with the body that implements the Exceptional Medical Expenses Act or with CIZ (an organisation that assesses and issues medical indications) in response to a medical indication. The implementing body is legally bound to reconsider its decision and to make known its findings on each lodged objection. If the objection relates to a decision regarding entitlement to care under the Act or a related reimbursement, the implementing body is obliged, if it does not entirely accept the objection, to ask the Health Care Insurance Board for its advice before responding to the objection. This obligation does not apply to objections concerning personal contributions, the size of which does not depend on medical factors. If the objector is unhappy with the implementing body’s response to his/her objection, he or she may lodge an appeal with an administrative court.

4. 4.1

International aspects Background

The social security systems of countries are usually confined to people who are resident or work in the country concerned. This may result in some people being insured twice or not at all if they work in one country and live in another. With a view to avoiding such situations that obstruct the free movement of workers, the European Union established Council Regulation No. 1408/71 of 14th June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the community (“Council Regulation”). Under this regulation, people who are or were insured in one country retain their social security protection if they move to a different EU member state to take up residence or employment. The Council Regulation also allows people to obtain medical care when holidaying in another member state or if they go to another member state with a view to obtaining medical care. A similar arrangement exists under the European Economic Area (EEA) agreement between the EU member states and Liechtenstein, Norway and Iceland. Another arrangement of this kind has been put in place under the agreement between the European Community and its member states on the one hand and the Swiss Confederation on the other concerning the free movement of persons. There are also less comprehensive bilateral social security agreements between the Netherlands and other countries that include arrangements for providing medical care. 4.2 Principles of international co-ordination

Basic principles All international co-ordination agreements for social security laws are based on the principles described below. Equal treatment Subjects of treaty states who visit other treaty states have the same social security rights and obligations as subjects of the country they are visiting. Applicable law All international co-ordination agreements specify the law that applies to persons who live or travel outside their own country. The objective is to avoid people being insured double (and thus having to pay premiums twice) or, conversely, having no insurance at all (and thus paying no premiums). The main rule is that employees and self-employed persons are subject to the law of the country where they work. However, there are exceptions to this rule. The most important exceptions concern persons on secondment in another country, persons employed in the international transport sector and persons who work at diplomatic stations. Retired persons are generally subject only to the laws of their country of residence. Insured periods and waiting times Entitlements to some social security services apply only after a person has been insured for a certain period of time. To a limited extent this applies to entitlements under the Exceptional Medical Expenses Act in the Netherlands. Waiting times are more common in other countries. People who were insured in country A and take out insurance in country B begin a new insurance life, so to speak. To avoid a situation where people lose the insurance time they accrued in country A, the time counts in the calculation of waiting time in country B, insofar as necessary. 4.3 Obtaining care in other countries

Care while abroad Four different situations with different administrative procedures may occur under the international agreements that exist. 1. Obtaining care in other countries by insured persons residing in the Netherlands Insured persons who require medical care while abroad are entitled to receive such care according to the legal arrangements existing in the country concerned, even if the type of care they require is not covered by their Dutch insurance. To invoke this entitlement they must show a European health care insurance card or a treaty form. The costs of the care they receive will be charged to the Dutch insurance. The insured person will be required to pay any excesses

2.

3.

4.

applicable under the laws of the country where the care is provided. The care insurer of the insured party issues the EU health care insurance card and treaty forms. People who travel to another country with a view to obtaining medical care in that country must ask their care insurer to provide an EU or treaty form. A care insurer has a right to refuse to issue such a form in certain cases if the required care is available in the Netherlands. Besides obtaining the care under an international agreement, a person may also in this instance apply for care by seeking recourse directly to his/her health insurance policy (also see section 1.6, Care outside the Netherlands). Dutch retirees and family members residing abroad and family members of people working in the Netherlands People who work abroad and draw a Dutch pension without receiving a pension in their country of residence (and their family members) and family members residing abroad of people who work in the Netherlands are not insured under the Exceptional Medical Expenses Act and are thus not liable to payment of premiums under the Health Insurance Act. These people are referred to as people with treaty rights. Under international agreements they are entitled in their country of residence to medical care payable by the Dutch insurance system. The Netherlands pays a fixed amount to the country of residence of people with treaty rights. This amount must be used to pay for all the medical costs of the persons concerned. Against this right to medical care these people are required to pay a contribution towards their entitlements under the treaty. They have a right to receive the no-claim refund and, if applicable, an allowance under the Health Care Allowance Act (refer to section 2.4). People with treaty rights are required to register with the Health Care Insurance Board. The board issues a form they must use to register with the insurance authority in their place of residence. This authority will provide them with an insurance certificate usable to obtain medical care in their country of residence. The same authority issues EU health care insurance cards and, if applicable, grants permission to obtain care outside the person’s country of residence. People with treaty rights are entitled to care under the legal system of their country of residence, even if the type of care they require is not covered by Dutch insurance. Where applicable, insured persons will be required to pay any excesses due under the laws of their country of residence. Many international agreements also allow these people to obtain medical care in the Netherlands or in another country that is a signatory to the relevant international agreement. They will usually need permission from the insurance authority of their country of residence because the costs of the care will generally be charged to the insurance system in that country. Foreign insured persons temporarily in the Netherlands Foreign insured persons temporarily in the Netherlands are entitled under the Dutch system to medical care that becomes necessary during their stay in the Netherlands, even if they require a type of care not covered by statutory entitlements under insurance in their own country. The insured person will be required to pay any excesses that are due under Dutch laws. Foreigners who require this kind of care must show an EU health care insurance card or treaty form issued by an insurance authority in their own country. Foreign nationals who travel to the Netherlands with the aim of obtaining care in this country may receive the care on presentation of a treaty form. In effect, the form represents the permission of the foreign insurance authority to obtain a medical care in the Netherlands. Foreign retirees and family members residing in the Netherlands of persons working abroad People who reside in the Netherlands with a foreign pension without receiving a Dutch pension, their family members and partners and children under 18 living in the Netherlands of people who work abroad are entitled to care under statutory arrangements in the Netherlands, even if they require a type of care not covered by entitlements in the country that pays their pension or the country where they work. The costs of the rendered care will be payable by the insurance system in the country concerned. The insured person will be required to pay any excesses that are due under Dutch laws. These people must register with a care insurer designated by the Minister of Health, Welfare and Sport and submit a form issued by the insurance authority of the country that pays their pension or their country of employment. After registering with a Dutch care insurer, they will receive a Dutch insurance certificate. Care is obtainable outside the Netherlands in the same way as described above for the people in category 1. Most international agreements also allow these people to obtain care in the country that pays their pension or their country of employment, or in another country that is a signatory to the relevant international agreement. They will generally need the permission of the insurance authority of their country of residence

because the costs of the care will usually be payable by the insurance system of their country of residence. 4.4 Procedures at the European Court of Justice

Proceedings before the court Disputes about care provided in the European Union or the European Economic Area may be placed before a national court of law with jurisdiction by persons who believe a breach has occurred of the mandatory rules of the EC Treaty or regulations based on the treaty. If a dispute arises about the interpretation of European legislation, a national court has the power, and in the final instance the obligation, to ask the European Court of Justice for a preliminary ruling. The court gives preliminary rulings in response to requests for guidance on the interpretation of provisions embodied in the EU treaty. The preliminary ruling is binding on national legal systems. The European Court of Justice is also hears “infraction cases” that the European Commission may institute if it believes member states are not applying European legislation correctly. The procedure begins with a formal request to a member state to comply voluntarily with the treaty requirements or the regulation concerned. If the member state refuses to discontinue the breach, the Commission will formulate a recommendation, stating its standpoint, and will invite the member state to take measures – which may be specified in detail – to rectify non-compliance within a period of time specified by the Commission. If the member state fails to act on the recommendation within the allotted time, the Commission has the right to file an appeal with the European Court of Justice. 4.5 Treaty countries

Treaty countries Insured persons and people with treaty rights are entitled to medical care in the following countries in accordance with the international co-ordination agreement applicable in the country concerned: • The European Union member states: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovenia, Slovakia, Spain, United Kingdom and Sweden; The European Economic Area member states: Iceland, Liechtenstein and Norway; Australia (only during temporary visits), Turkey, Morocco, Tunisia, Cape Verde, Croatia and Switzerland. The old social security treaty between the Netherlands and Yugoslavia still applies in Macedonia, Serbia and Montenegro (Federal Republic of Yugoslavia) and Bosnia-Herzegovina pending its replacement by treaty agreements between these states and the Netherlands. The treaty negotiations with Macedonia and the Federal Republic of Yugoslavia had been completed and the procedure has been initiated for introducing the treaties. Negotiations with Bosnia Herzegovina were still in progress mid-2005.

• • •

5. 5.1

Related legislation Health Care (Market Conditions) Act

The Health Care (Market Conditions) Act regulates the establishment of the Netherlands Care Authority (‘NZa’). The Act defines the tasks, powers and instruments of the authority and its relationships with the Minister of Health, Welfare and Sport and with other regulators and supervisory bodies.4 Organisation of Netherlands Care Authority The Netherlands Care Authority is an independent administrative body with legal personality. It is funded from the budget of the Ministry of Health, Welfare and Sport. The authority’s board consists of not more than three members. Stakeholder organisations have no special legal position in the preparation of the authority’s decisions. The personnel are employed by the authority and have the same conditions of employment as all other civil servants. The National Health Tariffs Authority and the Supervisory Board for Care Insurance will be absorbed into the Netherlands Care Authority. Tasks of the Netherlands Care Authority The Netherlands Care Authority exists to: • regulate the markets for providing, insuring and procuring care. This task extends to making and monitoring markets as well as regulating them. The authority regulates tariffs and services. It also promotes the transparency of markets and the availability of information about choices available to consumers; • oversee lawful implementation by care insurers of the provisions of the Health Insurance Act, including the care and acceptance obligations and the prohibition of premium differentiations; • oversee lawful and effective performance of the provisions of the Exceptional Medical Expenses Act by care insurers, care offices and the central office that administers the Exceptional Medical Expenses Act. Principal new powers of the authority The most important new power held by the Netherlands Care Authority is to impose specific obligations on parties with significant market power. It has been given the power to do this in order to cultivate the care procurement market in fields where free pricing exists. The authority further has powers to lay down general rules for care providers and care insurers to increase the transparency of the market for consumers. The authority will also be given the power to publish transparency information if care providers and care insurers fail to do so. Relationship between the Minister of Health, Welfare and Sport and the Netherlands Care Authority The Minister of Health, Welfare and Sport sets the main policies and takes political decisions on healthcare. The Netherlands Care Authority implements and enforces the law. Among other things the minister designates parts of the market where tariffs are freely negotiable. The authority then imposes obligations, if necessary, on a party that possesses significant market power. The minister also determines such matters as the form of price regulation in distinct parts of the market where he considers such regulation necessary. The authority works out the details and carries out the policy. The minister appoints the board of the Netherlands Care Authority, approves its financial estimates, work programme, financial statements and rules of its board and assigns its budget. The minister has power to issue orders to the authority about the way it works and how it carries out its tasks. This power extends to the content of policy rules and general regulations. The minister may recommend to the Crown that it annuls board decisions of a general nature. He may also intervene if the authority neglects its duties. Relationships between the Netherlands Care Authority and other regulators The Netherlands Care Authority has a duty to exchange information with other regulators like the Netherlands Competition Authority, Dutch Central Bank, Financial Markets Authority and Health Care Inspectorate for the purpose of harmonising and performing their tasks. These parties conclude co4

Parliament had not finished debating the Social Support Act at the time this brochure was published. The intention is for this Act to come into effect at the same time as the Health Insurance Act and the Care Allowances Act on 1st January 2006.

operation protocols with each other. The Netherlands Competition Authority watches over compliance with competition laws, the Dutch Central Bank (DNB) oversees the business economics of care insurers to make sure they are financially solid and the Financial Markets Authority monitors their financial practices insofar as unrelated to specific healthcare matters. The Health Care Inspectorate is charged with supervising the quality of care. Tasks/powers of the Netherlands Care Authority The Netherlands Care Authority’s tasks and powers for overseeing compliance with the Health Insurance Act and Exceptional Medical Expenses Act have been laid down in the Health Care (Market Conditions) Act. Tariffs in the healthcare sector are determined by the authority unless they have been excluded from regulation (as in the case of free market or exempted tariffs). Another task of the authority is to make and maintain markets in the healthcare field. The authority has also been entrusted with promoting the transparency of markets for the benefit of consumers. A desk will be established at the authority to enable people to report facts and circumstances that may constitute breaches of the Health Care (Market Conditions) Act. Anybody may contact the desk about bills rendered by care providers that are not in keeping with the tariffs set by the Netherlands Care Authority (“care fraud”). 5.2 Social Support Act

Background The Social Support Act5 is one of the government’s answers to issues that will confront society in the coming years because of demographic, socio-cultural and socio-economic developments. Issues that must be addressed include an ageing population, cultural integration, individualisation and the declining number of working people compared with the number of people requiring full or partial support, like children, people with limitations, the disabled, psychiatric patients and the elderly. These are matters that call for a new balance of responsibilities between public and government and also between the authorities and citizens. The nation’s social capital must be protected, retained and if possible reinforced. At the same time, the outlined developments cannot be allowed to impose an unacceptable and unaffordable burden on services rendered under the Exceptional Medical Expenses Act. The government’s view is that the Netherlands needs a strong social structure in which selforganisation, social commitment and personal responsibility are important factors play in the existence of professional arrangements for care, culture and welfare. The government is convinced that by providing good primary facilities and preventive support it will be far easier to fulfil the wish of the participation in mainstream society by all members of the public, young and old, with and without limitations. Moreover, it will be possible to provide professional support far more systematically way where such an approach is required. A collective insurance system like the Exceptional Medical Expenses Act will remain available to people with a severe and prolonged need for care. Far more than is presently the case, a cohesive local policy will need to be pursued on social support, housing, welfare and adjacent fields. Within a direction-setting legal framework, municipalities will be given the scope and take responsibility for conducting policy. They will be urged to achieve results for which they will be accountable to the public at large and especially to people in need of care. This approach necessitates greatly strengthening a municipality’s position for the provision of social support. Efforts in this direction started with the introduction of the Welfare Act 1994. Introduction of the Services for the Disabled Act significantly increased the responsibilities that municipalities have for ensuring the participation of the elderly and disabled in mainstream society. The Social Support Act goes a step further along this path. What is more, the Act makes it possible to frame integral policy by bundling and reinforcing existing regulations to serve the local population. The government sees the present bill as the first step towards bundling regulations and powers for local governments. Nature of the Act The government’s intention in its bill for the Social Support Act is to encourage people with the ability to do so to find their own solutions – more than is currently the case – to problems that arise in their social setting. That is why the government has raised for discussion matters that over the years have become taken for granted in the care sector and is calling on people to make greater use of their own resources. The government is convinced that municipalities are excellently placed to provide a
5

Parliament had not finished debating the Social Support Act at the time this brochure was published. The intention is for this Act to come into effect on 1st January 2006.

cohesive system of support for people insufficiently able in certain situations to find solutions on their own or together with others. This concerns such matters as housekeeping support, offering social support, adapting the home and arranging wheelchairs and mobility scooters. The Social Support Act can establish an unbroken chain of support and enlarge bespoke services. The Act also creates a possibility for municipalities to be more service-minded and to reach the people less able to speak up for themselves. The present system, especially the Exceptional Medical Expenses Act, provides no footings for such an approach, because it leans far more towards people who are able to indicate the care they need. The bill provides a stronger basis for the involvement of and accountability to members of the public and local players (horizontal accountability). The Social Support Act is a new law that will absorb and bundle the following existing laws (or parts thereof): • Services for the Disabled Act; • Social Welfare Act 1994; • domestic help provided under the Exceptional Medical Expenses Act; • some grants schemes under the Exceptional Medical Expenses Act (like support provided to the elderly, infirm and others requiring assistance by family/friends outside the professional setting) and services in sheltered accommodation. People legally entitled to facilities Municipal authorities are responsible for offering facilities that allow people to participate in mainstream society and to help each other. Unless otherwise stipulated, foreign nationals in the Netherlands without valid residency papers are excluded from services offered under the Social Support Act. The bill makes municipalities responsible for deciding whether somebody entitled to an individual service will have a choice of receiving the service in kind, getting a financial allowance or obtaining a personalised healthcare budget. A municipality may decide that a person aged 18 or older must pay a personal contribution. A financial allowance may further be made dependent partly on the income of the person who is entitled to services. Implementation of the Act The purpose of the Social Support Act is to allow everybody to take part in society. The Act assigns responsibility for this participation to the public, companies and community organisations. They are the ones that must take initiatives that ensure that nobody faces unnecessary obstacles in everyday life. Local communities should take steps to get everyone to participate. The municipality can provide support if a helping hand is required to achieve this situation. More than central or provincial government, a municipality can mobilise members of the public and organise support close to members of its population. The municipality is able to offer bespoke services at the heart of the community. Municipalities have a duty to offer services that allow people to participate in society and help each other. They can embed service offerings at a single point of contact that citizens can approach to obtain information and advice and to apply for services. Range of services The Act overarches the social support field and is designed to address the nine subjects listed below: • promote social cohesion and quality of life in villages, districts and neighbourhoods; • provide preventive support for young people with behavioural problems and for people with parenting problems; • provide information, advice and support for clients; • support informal care providers (family, friends, etc.) and voluntary workers; • promote participation in mainstream society and the independent functioning of people with a limitation or chronic psychological problem and people with a psychosocial problem; • provide facilities for people with limitations or chronic psychological problems and for people with psychosocial problems to allow them to continue functioning independently or join mainstream society; • offer care hostels and shelters for women; • promote public mental health care (excluding psychosocial help in the event of disasters); • promote policy on addiction.

The Social Support Act also assigns a task to provincial governments, namely: • facilitation of support services, i.e. by undertaking activities that underpin the preparation and rendering of support and that pave the way for implementation of a municipality’s social support policy. The government wants municipalities to involve their citizens and client organisations in plans for this Act. At least once every four years a municipality will be required to draw up a plan that shows how social support is organised. Funding The Social Support Act enlarges the present range of tasks that municipalities perform. The municipalities will be able to absorb the costs through extra money that central government will pay into the Municipalities Fund out of the budget. The amount will be in keeping with the increased tasks. The government has opted for funding through the Municipalities Fund in order to maximise the freedom that municipalities have to set their own policies and to minimise their implementing expenses. Management and supervision Accountability for policy and implementation of the Social Support Act must take place primarily at municipal level. Therefore, municipalities will be accountable principally to their citizens. Apart from the obligation to provide care, central government will not impose any restrictions that limit the freedom of a municipality to set its own policy. Disputes People will have the right under the general Administrative Law Act to lodge objections and appeals against decisions by the municipality.

List of abbreviations More information about international aspects of the Health Insurance Act and the Exceptional Medical expenses Act can be found in a separate brochure published by the ministry entitled Uw ziektekostenverzekering als u in het buitenland woont (Your health care insurance if you live outside the Netherlands). The brochure can be downloaded from the ministry’s website at www.minvws.nl by entering the keywords: brochures, ‘international situations’ brochure.

Acts of Parliament General Administrative Law Act (Algemene wet bestuursrecht) (Netherlands Bulletin of Acts, Orders and Decrees 1992, 315), as most recently amended by an Act of 3rd February 2005 (Netherlands Bulletin of Acts, Orders and Decrees 2005, 71) Exceptional Medical Expenses Act (Algemene Wet Bijzondere Ziektekosten) (Netherlands Bulletin of Acts, Orders and Decrees 1992, 392), as most recently amended by an Act of 9th December 2004 (Netherlands Bulletin of Acts, Orders and Decrees 2005, 27)6 General Income-Linked Regulations Act (Algemene wet inkomensafhankelijke regelingen), Act of 23rd June 2005 (Netherlands Bulletin of Acts, Orders and Decrees 2005, 344) Constitution (Grondwet) (Netherlands Bulletin of Acts, Orders and Decrees 1815, 45), as most recently amended by an Act of 20th January 2005 (Netherlands Bulletin of Acts, Orders and Decrees 2005, 52) Competition Act (Mededingingswet) (Netherlands Bulletin of Acts, Orders and Decrees 1997, 242), as most recently amended by an Act of 30th June 2004 (Netherlands Bulletin of Acts, Orders and Decrees 2004, 345) Council Regulation (EEC) No. 1408/71 of 14th June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community (OJ No. L 149 of 5.7.1971) Social Welfare Act (Welzijnswet) (Netherlands Bulletin of Acts, Orders and Decrees 1994, 447), as most recently amended by an Act of 9th July 2004 (Netherlands Bulletin of Acts, Orders and Decrees 445, 2004) Unemployment Insurance Act (Werkloosheidswet) (Netherlands Bulletin of Acts, Orders and Decrees 1986, 566), as most recently amended by an Act of 28th April 2005 (Netherlands Bulletin of Acts, Orders and Decrees 2005, 274) Financial Services Act (Wet financiële dienstverlening), Act of 12th May 2005 (Netherlands Bulletin of Acts, Orders and Decrees 2005, 339) Income Tax Act 2001 (Wet inkomstenbelasting 2001) (Netherlands Bulletin of Acts, Orders and Decrees 2000, 215), as most recently amended by an Act of 28th April 2005 (Netherlands Bulletin of Acts, Orders and Decrees 2005, 227) Act Governing Joint Funding of Elderly Health Insurance Fund Patients (Wet medefinanciering oververtegenwoordiging oudere ziekenfondsverzekerden) (Netherlands Bulletin of Acts, Orders and Decrees 1986, 117), as most recently amended by an Act of 30th January 2002 (Netherlands Bulletin of Acts, Orders and Decrees 2002, 82) Medical Insurance (Access) Act (Wet op de toegang tot ziektekostenverzekeringen) 1998 (Netherlands Bulletin of Acts, Orders and Decrees 1998, 438), as most recently amended by an Act of 2nd December 2004 (Netherlands Bulletin of Acts, Orders and Decrees 2004, 712) Individual Health Care Professions Act (Wet op de beroepen in de individuele gezondheidszorg) (Netherlands Bulletin of Acts, Orders and Decrees 1993, 655), as most recently amended by an Act of 2nd December 2004 (Netherlands Bulletin of Acts, Orders and Decrees 2004, 712) Health Care Allowance Act (Wet op de zorgtoeslag), Act of 16th June 2005 (Netherlands Bulletin of Acts, Orders and Decrees 2005, 369)6

6

The Exceptional Medical Expenses Act, Care Allowances Act , Health Insurance Act and Health Care Charges Act are subject to substantial amendment if parliament passes the bill tabled for the Introduction and Modernisation (Health Insurance Act) Act (Parliamentary Papers 2004/05, 30 124 A) and it becomes law.

Services for the Disabled Act (Wet voorzieningen gehandicapten) (Netherlands Bulletin of Acts, Orders and Decrees 545, 1993), as most recently amended by an Act of 27th September 2001 (Netherlands Bulletin of Acts, Orders and Decrees 2001, 481) Health Care Charges Act (Wet tarieven gezondheidszorg) (Netherlands Bulletin of Acts, Orders and Decrees 1980, 646), as most recently amended by an Act of 9th December 2004 (Netherlands Bulletin of Acts, Orders and Decrees 2005, 24 and 27)6 Insurance Supervision Act 1993 (Wet toezicht verzekeringsbedrijf 1993) (Netherlands Bulletin of Acts, Orders and Decrees 1994, 252), as most recently amended by an Act of 3rd February 2005 (Netherlands Bulletin of Acts, Orders and Decrees 2005, 71) Social Health Insurance Act (Ziekenfondswet) (Netherlands Bulletin of Acts, Orders and Decrees 1992, 391), as most recently amended by an Act of 23rd December 2004 (Netherlands Bulletin of Acts, Orders and Decrees 2004, 725) Sickness Benefits Act (Ziektewet) (Netherlands Bulletin of Acts, Orders and Decrees 1913, 204), as most recently amended by an Act of 23rd December 2004 (Netherlands Bulletin of Acts, Orders and Decrees 2004, 717, 720 and 731) Health Insurance Act (Zorgverzekeringswet), Act of 16th June 2005 (Netherlands Bulletin of Acts, Orders and Decrees 2005, 358)6 Bills Social Support Act (Wet maatschappelijke ondersteuning) (Parliamentary papers II 2004/05, 30 131) Health Care (Market Conditions) Act (Wet marktordening gezondheidszorg) (Parliamentary papers II 2004/05, 30 186)

Published by: Ministry of Health, Welfare and Sport Address for visitors: Parnassusplein 5 2511 VX The Hague The Netherlands Correspondence address: PO box 20350 2500 EJ The Hague The Netherlands Telephone +31-(0)70-340 79 11 Telefax +31-(0)70-340 78 34

The Ministry of Health, Welfare and Sport receives numerous requests for information from the Netherlands and other countries about the system of health care insurance that exists in the Netherlands. This brochure provides the required information and is intended mainly for readers with some prior knowledge of health care insurance. Subjects the brochure covers include the Health Insurance Act, Health Care Allowance Act and Exceptional Medical Expenses Act. The brochure further contains information about international aspects of health care insurance schemes.

Internet: www.minvws.nl September 2005