The health system is one of the great concerns of Spanish citizens. In fact, according to the Ministry of Health, more than 742,500 patients were waiting for structural surgery in June 2022, with an average wait time of 113 days.
Meanwhile, health insurance has been registering steady growth: the number of insured has increased by about 10% per year over the last five years (2017-2021).
Currently, more than 10 million are insured in Spain. 57% conform to individual policies, while 43% conform to group policies.
However, health insurers and their customers face several challenges, of which we reveal three in this article: the decline in reciprocity, for many customers unable to access a private health policy due to age or their medical history. Difficulty and difficult understanding for users of insurance policies and their coverage.
Decline in administrative reciprocity
Administrative reciprocity is a health coverage mechanism that provides state authorities with the possibility to choose between obtaining health care through public health or through agreements with private insurance entities.
This model benefits insurers in the sense that it provides them with a large number of policyholders. However, they cannot choose the risks and the premium they receive is a fixed amount per insured person, irrespective of the number or nature of services provided.
However, there are two issues that threaten the economic viability of this model:
- Premium updates do not cover the expenses accruing from ageing, chronicity of diseases, increase in frequency of consultations and the impact of inflation in recent times.
- In less than ten years, the number of mutual members receiving health care through an insurance company has dropped by nearly 10%. It has increased from 1.97 million in 2012 to 1.77 million in 2021.
This model has turned out to be flawed for insurers: while per capita public health expenditure in 2021 was €1,592, the average premium cost €936. Furthermore, the accident rate of mutual members was 100.8%, with the amount of benefits paid by insurers exceeding the amount of premiums.
One of the consequences of this shortage situation is that the number of hospitals that care for mutual members has decreased.
Difficult access to health policy
Before contracting health insurance, insurance companies require their customers to fill out a questionnaire in which they must declare questions such as: what diseases they suffer or have suffered, if they have had any injuries or any surgical operations. Has happened.
Based on this information, the company assesses the risk involved in covering a specific individual and will decide whether to approve the request, decline it, or exclude the insured from certain insurance coverage. Actuaries have more difficulty estimating the cost of health policies than anyone else.
In this sense, there are maladies such as diabetes, cancer, heart disease, cerebrovascular disease or HIV that prevent patients from accessing health insurance. In these cases, companies believe that the risk insuring them would be too high due to the cost that they would have to assume.
In fact, the right to be forgotten about cancer is currently being debated in Spain in order to end discrimination in contracting health insurance for cancer survivors.
Another reason why companies may decline to take a health policy is the age of the patient. In most cases, the maximum age to access the health policy is 65 years, although some insurance companies are increasing this age to 75 years.
A complicated language
Insurers use technical and complicated language in their policies which prevents information from reaching the customer in a clear and simple manner. This makes it difficult for them to understand and make informed decisions about the type of health insurance they need.
This lack of transparency and clarity means that the insured only knows the limits of his policy at the time he is going to use it (and not at the time of contracting it). The difficulties of comparison between health insurance can be considered as a business strategy of the insurers.
If the private health insurance sector has one in four Spaniards as a customer, it will have to improve the information it provides to consumers about the services they can get from their policy.
Another recommendation is that insurance companies work more on prevention programs that help their policyholders avoid getting sick. This would have a double social and economic effect: on the one hand, it would improve the health of the population and on the other hand, as a result of the above, the frequency of policies and the accident rate would decrease, thus improving the economic scales of insurers…
This article is based on the content of the report “A healthcare system in change: the challenges of private insurance in Spain” (March 2023), prepared by the Extraordinary Chair of Sustainable and Responsible Health, based at the Faculty of Commerce and Tourism. from the Complutense University of Madrid.