A Method of Making Actuarial Estimates for a Compulsory Health Insurance System

Abstract

T1HE actuarial basis of a compulsory health insurance system, in the final analysis, resolves itself into a problem of simple arithmetic. Obviously enough money must be raised under the system to pay for the benefits provided thereby, and benefits provided under the plan cannot be more extensive and complete than what can be supported by the health insurance fund. In other words, under a compulsory health insurance plan, as with all other things, it is impossible to get something for nothing, and all that is offered under the insurance system must be paid for out of funds collected from the employer, employee, and/or the government. There are at least two approaches to the problem of determining the costs of such a sytem. One may fix arbitrarily the maximum amount of contributions that it appears wise or prudent to levy for the plan, thereby determining the amount of money with which can be bought. Or one may determine what appears to be the minimum number of which should be offered in bringing medical care to the desired number of persons, and then, upon a basis of these needed services, determine how much money will be needed to pay a fair price for those services. In either case it will be necessary to estimate as accurately as possible (a) the total or per capita cost of to be afforded, and (b) the total or per capita contribution which will be collected to pay for the services. Since compulsory health insurance is a new field to the people of this country, both the amount of the levy which can and should be collected for the support of the schemie and the number and nature of what are to be called basic medical services afforded to the largest possible number of the population are matters that, for the want of a better method, must be more or less arbitrarily determined. But a start is needed, and enough under the health insurance system must be offered to meet at least the needs of the largest number of persons possible at a cost that will not be over-burdensome for the individual, the employer, or the state or federal government. Otherwise, the plan cannot survive, and cannot be instrumental in meeting the difficulties encountered under the system of the private practice of medicine.