1 Introduction
Over the last 20 years, European Union (EU) healthcare policies and their effect on healthcare systems and politics at national level have attracted significant attention from social, legal and political scientists (Anderson 2015, chapter 7; Greer and Kurzer 2016, Mossialos et al. 2010; Steffen 2005; see also Coron 2018). In this domain, treaties are categorical as to the limited competencies of supranational provisions, and Member States ostensibly retain power over a number of crucial aspects of their health policies (Vollaard et al. 2016). Unsurprisingly, what research has essentially reported in this broad context is a rather gradual development of EU healthcare policies, with more or less perceptible (and often indirect) effects at national level. Due to its frequently unanticipated nature, such development has typically taken circuitous routes and mainly manifested in two ways: first, by the dissemination of standards and guidelines or through the regulation of certain goods or commodities—knowing that the EU has a number of regulatory prerogatives in relation to vital health products, such as pharmaceuticals (Permanand 2006); and, second, through the court’s application of internal market law which, in turn, may affect several segments of health services delivery, policies or rules governing healthcare professionals (Duncan 2002). EU fiscal governance was recently recognized as a “third face” of EU health policy (Greer 2014). Indeed, and after the financial crisis, the EU has gained new powers to enforce budgetary austerity. Through a series of coercive policy recommendations to Member States about the governance of their healthcare systems, fiscal policy became in turn more “rigorous and intimate”, provoking significant shifts in healthcare decision-making at national level (Greer et al. 2016).
There is an important segment of the healthcare sector that arguably lies at the crossroads of these three dimensions—in the sense that it is influenced by supranational standards and regulatory provisions, marked by tensions between EU and domestic law and affected by post-crisis regulation—yet it has received very limited attention to date (though see Thomson and Mossialos 2007). It is the private (usually voluntary) health insurance (PHI) industry, a term that refers to the variety of firms offering either or both types of substitutive health coverage (that would otherwise be provided by a national health insurance or system); complementary coverage (for services excluded from or not fully covered by the public purse); or supplementary coverage, which essentially supplies consumers with greater freedom of choice and faster access to care (Thomson and Mossialos 2007). In several EU countries, PHI accounts for a significant share of health expenditure and is even the main provider of care for some benefits. Crucially, it has faced major transformations over the last 30 years, and this as a result of changes in EU law and regulations, often in combination with more or less explicit forms of budgetary constraints or retrenchment efforts at the domestic level.
There is an obvious reason why PHI has largely remained under the radar of scholarship on EU healthcare politics. In effect, it is essentially through a series of directives aimed at governing the insurance industry as a whole that EU law has remodelled PHI. A similar reason arguably accounts for the rather limited interest of students of the public-private mix in healthcare in the study of this issue—a term that we use in the following pages both to describe the combination of public and private actors in health coverage (see Ebbinghaus 2011), but also in health benefits and services delivery (see also Benoît and Coron 2019). As amply documented in the following pages, the potential implications of insurance regulation for the health sector were indeed regularly underestimated or simply disregarded, a statement that applies both to academic research and, critically, to policy-making at domestic level—with policymakers often unaware of the prior effects of EU law and regulation on private health insurers. In turn, this relative ignorance was a source of recurrent mismatches and unexpected effects of policy choices, with a number of implications for the PHI industry. Crucially, this eventually contributed to changing the public-private mix in healthcare.
In an attempt at filling this gap, this collective book gathers a multidisciplinary team of specialists in social policy and the insurance industry. On this basis, our ambition is to provide a broader account of the diverse long-term effects EU provisions had on the private health insurance industry—and their important implications for the political economy of contemporary Welfare States. In this book, we are more formally motivated by three series of research questions. The first relates to the influence of EU law and regulation on the nature and the place of PHI, which contributors intend to prove and to characterize. We are also seeking to determine if and how the effects of these directives and regulations interacted with both the outputs and the outcomes of health policy in several countries (Belgium, France, Ireland and the Netherlands), particularly in a well-documented context of “permanent austerity” (Pierson 1998) and where retrenchment efforts are now firmly entrenched in Welfare State reform (Pierson 2001). Thirdly (and ultimately) our goal is to evaluate if, how and to what extent the interactions between EU law and regulations and health policy at domestic level affected the nature and scope of health coverage in the countries under study.
Overall, the story that we narrate here is that of a growing “decoupling” (Trein 2017) between insurance regulation and health policy, entailing a number of side effects for the private health insurance industry, for the structure of the public-private mix in healthcare and for the nature of health coverage, yet with contrasting effects from one country to another. At a more conceptual level, such a broad finding might seem quite trivial to readers familiar with existing scholarship on Europeanization (see Graziano and Vink 2007). What we describe is indeed an umpteenth story in which a series of directives are adopted with the explicit aim of harmonizing domestic rules applying to an industry that eventually results, after a conflictual implementation process, in multiple unintended effects due to its interactions with a variety of national institutional dependencies. There are, however, a number of lessons to draw from this seemingly classical conclusion due to the compound nature of the private health insurance industry. Indeed, our findings echo a number of burgeoning debates related to EU influence on health policy on the one hand and to the role played by private providers in social policy at national level on the other. Together, they delineate future research agendas discussed in greater length below.
The rest of this Introduction is organized as follows. In Sect. 2, we start by positioning our research questions and our contribution in the wider literature. We then introduce the main analytical structure permeating the various contributions of the book. Section 3 provides an overview of our research design and case selection process. To understand how the European “matrix” affected PHI and the public-private mix in healthcare, we have undertaken an analysis of its genesis and of its effects at national level, through a comparative analysis of four countries. Section 4 present the contributions to the book, grouped into three parts—the first on the political economy of EU law and regulation related to PHI, the second based on large-n comparisons of the effect of these provisions on PHI and the third part dedicated to in-depth, country case studies. We also reflect in this section on how our findings echo wider debates in the literature.
2 Private Health Insurance in the European Union: Marketization Embraced?
2.1 EU Insurance Law and Regulation as a Potential Vehicle for the Marketization of PHI
This book maps the transformation of the private health insurance industry in the EU over a period of around 30 years, starting with the debates that led to the passage of “Insurance” directives in 1992. The choice of this point of departure is justified by the ambition of these texts, with the explicit aim of creating a unified legal framework for insurance activities in Europe, in order to facilitate competition between insurers in an increasingly unified Single Market. European integration is pushed a step further some five years later, with the opening-up of a 12-year process of fierce political battles around the reform of solvency rules governing insurance companies, resulting first in the adoption of two directives in 2002 (known as the “Solvency I” system) and, more significantly, of the Solvency II directive in 2009—which finally came into effect in January 2016. Presented as a response by EU authorities to the financial crisis, this text’s most explicit goal was to set up a risk-based approach to insurance regulation, involving a number of changes in terms of capital requirements, risk management and governance structures of insurance activities.
As already suggested by this very brief outline of the European policies considered in greater detail throughout the book, PHI was not the principal target of these different texts. Intriguingly, healthcare as a policy matter was not a salient issue in the debates surrounding the building of such a “European government” (Jullien and Smith 2014) of the insurance industry, especially as compared with other life and non-life insurance activities. Part of the reason for that situation lies in the relatively marginal status of PHI in the wider insurance industry in Europe—where in most Member States, a significant share of health expenditure is covered by the public purse. Private health insurance companies are thus typically small or medium sized firms. They are also less financialized than most of the insurance industry. Moreover, they also tend to cover a much more limited array of risks than the dominant insurance companies, essentially circumscribed to health coverage and occupational welfare. In turn, and when the largest insurance firms operating across the continent do offer health-related products of some kind, they rarely constitute the core of these companies’ growth strategy.
There is another set of peculiarities of PHI in Europe that explains its rather peripheral position in the industry and, by extension, in regulatory policy agenda. Most private health insurers across the continent are indeed non-profit companies organized along solidarity-based or democratic principles—meaning that they are usually run by a democratically elected board or by employer and employee representatives, and that they generally use their gains to increase the benefits or the coverage provided to their members. There are historical reasons for that: in many Western European countries (particularly in continental Europe), PHI has developed before the formation of contemporary Welfare States, often as emanations of churches, charities, trade unions or employers’ associations. In several countries, various compromises were adopted to integrate these entities after the formation of modern Welfare State institutions, sometimes through the delegation to these entities of all or part of the management of healthcare systems or services, sometimes by providing them with a more minor role. This means that PHI has almost always kept strong ties with or within the Welfare State and by the same token, is usually heavily regulated or even governed at domestic level. As a consequence, the public-private mix in healthcare in Western Europe tends to be integrated into fixed and rigid regulatory frameworks.
EU insurance law and regulation hits this balance. As of 1992, Insurance directives opened up the PHI market to competition, notably to for-profit insurance companies. More importantly, a number of provisions maintaining PHI close to public healthcare systems were considered selective advantages and gradually removed. With Solvency II, private health insurers now have to comply with stricter solvency requirements. They also need to make additional financial provisions and find ways to increase the value of their funds—which, in a broader context of low interest rates, often means searching for further (potentially riskier) diversification benefits (Standard and Poor’s 2016). Additionally, this text conveys a more explicit alignment of their governance with for-profit insurance companies and, more broadly, financial firms. In summary, EU laws and regulations, at least formally, seem to induce a growing marketization of PHI—with the openness of the health insurance market to new actors, posing a number of threats for the business model of non-profit entities, with an intensification of (possibly price-based) competition and by potentially paving the way for the increased financialization of the sector.
In this context, tracing the political sources of these formal provisions and determining whether they effectively translated into an actual marketization of private health insurers is the guiding thread of the different contributions of this volume. Symmetrically, the notion of marketization permeates the three research questions addressed in the following chapters. In determining whether EU law and regulation changed the nature of PHI and if so, how, we are primarily interested in elucidating whether it was in the sense of increased marketization and, critically, with which measurable effects on the industry. By looking at whether and how these same provisions interacted with health policy at domestic level, our motivation is predominantly to evaluate whether it introduced more market logics, b...