Italians reject private health insurance
Health: Italians Pay for the Doctor, Not for Private Insurance
Agenzia Giornalistica Italia (AGI)
June 2, 2005
Between 1991 and 2002 the trend towards private insurance among Italian families has been steadily growing but they still remain “under-insured” compared to the international standards. Mainly families with higher income from central and northern Italy tend to stipulate insurance policies, their family head often has a university degree or equivalent and is a manager or autonomous professional and his financial portfolio comprises stocks and life insurance. These are the results of a recent Ania study analysing Bank of Italy surveys on the finances of Italian families. In 2003 the ratio between insurance policies and GDP in Italy equalled 2.6 pct., about one percentage point less compared to the major European countries. The difference results to be even higher excluding car insurance policies from this comparison. The ratio then hardly reaches 1 pct. in Italy, whereas other countries have a ratio twice as high. Particularly low the demand of families for health insurance, despite the fact that Italians, notwithstanding coverage by the national health system, spend large amounts in private health services. Only a very small part of private expenses (about 1 pct. of the total) is attributable to the subscription of insurance policies, funds or other schemes. The main part of private expenses is directly goes into specialised medical exams and diagnosis for which the public health system often foresees very long waiting times.
Comment: No national health system covers 100% of health care costs. Italy is no exception. But the adequacy of the public system may be reflected by the size of the market for private health insurance.
It appears that a major purpose of private coverage in Italy is to purchase a place at the front of the queues for specialized care. The low uptake of private insurance suggests that queues are not at a crisis level in Italy. Of course, this is not to say that excessive queues can be ignored. Public efforts must continue to ensure the funding of adequate capacity in the health care delivery system.
What about the United States? We do have a program of social insurance: Medicare. Do we supplement Medicare for the purpose of bypassing queues? Not really. Although there may be patchy areas of deficient capacity, in general our high rate of health care spending has ensured a generous capacity in our system, in fact, often an excess capacity that results in over-utilization.
Although excessive queues are not a major issue in the United States, over two-thirds of Medicare beneficiaries have some form of supplemental insurance. Why is that? It is because Medicare covers only about 45% of the beneficiaries’ total health care services. Thus our reason for a private supplemental insurance market is not to circumvent queues, but it is to provide the financial capability for accessing beneficial health care services.
Many suggest that we should expand Medicare coverage to include everyone. But if we do, we need to increase the benefits to cover closer to 70% of health care services if we are to provide adequate financial security in the face of health care needs. But that 70% is not quite as bad as it would seem. With a universal system we would dramatically reduce administrative waste and non-beneficial high-tech excesses.
We are almost there since 60% of our total health care spending is already funded through the tax system. But what waste! If we bump that up to 70% and demand that we replace our wasteful fragmented system of funding care with an efficient single payer, then, like the Italians, we could reject the efforts of private insurers to displace our own public system of funding health care.
When it comes down to who is going to handle our pooled health care funds, I’ll trust our own public administrators long before I’d trust the private bureaucrats.
For an April 2005 Medicare fact sheet from KFF:
http://www.kff.org/medicare/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=52974