10 - Private health insurance and the internal market

Summary

Introduction

In 1992, the legislative institutions of the European Union (EU) adopted regulatory measures in the field of health insurance. The mechanism affirming the free movement of health insurance services – the Third Non-life Insurance Directive – does not apply to health insurance that forms part of a social security system. But all other forms of health insurance, which we refer to as ‘private health insurance’, fall within the Directive's scope. This chapter examines the implications of the Directive, and some aspects of EU competition law, for the regulation of private health insurance in the European Union. The EU-level regulatory framework created by the Directive imposes restrictions on the way in which governments can intervene in markets for health insurance. However, there are areas of uncertainty in interpreting the Directive, particularly with regard to when and how governments may intervene to promote public interests. As in most spheres of EU legislation, interpretation largely rests on European Court of Justice (ECJ) case-law, so clarity may come at a high cost and after considerable delay.

The chapter also questions the Directive's capacity to promote consumer and social protection in health insurance markets. In many ways, the Directive reflects the health system norms of the late 1980s and early 1990s, a time when boundaries between ‘social security’ and ‘normal economic activity’ were still relatively well defined in most Member States. Today, these boundaries are increasingly blurred – the new health insurance system in the Netherlands is a case in point.