People with average incomes contribute most to healthcare, wealthy the least: CPB
People with average incomes contribute relatively the most to Dutch healthcare, while the wealthy pay the least of their income to healthcare, the Bureau for Economic Policy Analysis (CPB) said in a report on Tuesday. The proposed reduction in the healthcare deductible has little effect on this.
The CPB examined the income solidarity of the healthcare system for the first time since the implementation of the Health Insurance Act in 2006. An important requirement of the system, in which Dutch healthcare is financed by premiums, taxes, and contributions like the deductible, was solidarity between income groups - those who earned more would also contribute more to healthcare.
In practice, that’s not really working out, according to the CPB. Although the highest incomes contribute the most to the healthcare system in absolute terms, they spend the smallest percentage of their incomes on it. High earners spend 6.6 percent of their total income on healthcare, while households with an average income spend 9.7 percent.
Compared to the situation before 2006, that solidarity even seems to have decreased, the CPB said. The planning agency attributed this to how the income-dependent contribution is arranged. This contribution, a percentage of the income that is withheld, is limited by a maximum. Anyone who earns more than the maximum does not pay a higher amount. A recent increase in the threshold significantly improved solidarity between incomes, the CPB said, recommending another increase to improve the situation even more.
The current system does succeed in preventing people who need a lot of care from paying considerably more for it. Their costs are largely covered by the common pot, to which people who need little care also contribute.
Proposals to increase the income-dependent contribution and to finance a larger part of healthcare costs in this way are not new, according to the Volkskrant. Last year, the Council for Public Health and Society advocated for this, and last month, DSW chairman Aad de Groot did the same.
According to De Groot, a higher income-dependent contribution could also significantly reduce the ever-increasing nominal premium, the amount that everyone pays to their health insurer every month. But such plans are extremely sensitive in The Hague and the current Cabinet has no intention to increase the income-dependent contribution.
Health Minister Fleur Agema does want to cut the healthcare deductible by half in 2027, but the CPB calculated that this would have little effect on income solidarity. According to CPB, the lower deductible will actually increase the amount that people spend on healthcare because more people will go to the doctor.
