Social Insurance Model Research Articles

Social Security Pensions in the Maghreb: A Study of Morocco and Tunisia

Long‐term pension schemes in Morocco and Tunisia, taking all elements together, are very much in decline and for the moment there is no serious option available to make up for the limited scope of the contributory model of social insurance. Furthermore, efforts to coordinate and harmonize these schemes are only just getting going. Eligibility conditions are very strict and the benefits paid — to people with disabilities, to retirees or their surviving dependants — are frugal. Privatization of pensions helps only those able to take out private insurance, benefiting a tiny proportion of the target population. Tunisia, however, has provided its people with better safeguards than Morocco, a more populous country whose rulers are less inclined to be generous in this respect. Whatever the case, those in charge of social insurance in both countries have a long way to go before their rapidly ageing populations can aspire to a relatively decent quality of life.

Come the Revolution: Are We Finally Ready for Universal Health Insurance?

Cyclically, social, economic, and political forces catapult the issue of health insurance to the top of the national consciousness. Rising health care costs, a relatively long recession, rising unemployment, and growing number of uninsured Americans makes today just such a time. One factor that distinguishes today's health care access crisis from others is the impact on a vocal, visible and voting constituency - the employed middle-class. A spate of federal and state legislation proposing some type of universal health insurance is evidence of public dissatisfaction with the health care access status quo. I argue that while there may be tacit agreement that it is a national disgrace that between 40 and 60 million Americans are uninsured at some time during the calendar year, universal health insurance is an improbable solution. In a time when market models are the accepted answer to many traditionally public sector problems, it is hard to imagine that a social insurance model for health care could be politically successful. Mounting federal and state budget deficits make untenable the additional allocations of GDP necessary to fund universal health insurance. In addition, social insurance is explicitly dependent on the cross-subsidization of health care from the insured to the uninsured and from the healthy to the sick. I conclude that our culture of individual rights makes such a philosophical shift very unlikely.

Two Worlds of Pension Reform in Western Europe

The European pension policy landscape is generally depicted as a major building site, where governments are scaling back the pension systems they have inherited from the postwar years in order to adapt them to population aging. Europe is often seen as a graying continent that will have to face the effects of a demographic time bomb and that needs to reduce its pension commitments radically. As a matter of fact, in the last decade pension policy has gained unprecedented levels of prominence in the political arena throughout western Europe, and several countries have cut pension schemes. This image reflects some broad trends, but a closer analysis of pension policy in western Europe reveals a number of other important developments. Pension systems are not simply being adapted to population aging but are responding to at least two additional sets of pressures: the new career profiles that have emerged with the transition to a postindustrial labor market structure and highly integrated international financial markets. Current pension systems were designed in a time characterized by stable labor markets and limited cross-border capital mobility. Changes in these two areas, as well as in the demographic composition of societies, create economic and political pressures to rethink part of their structure. European pension systems are exposed to these pressures in broadly similar ways. However, the way in which they respond to them varies considerably across countries and is to a very large extent shaped by the institutional structure of the pension systems that are currently in place. Population aging, labor market changes, and stronger financial market integration generate different political demands and policy responses depending on whether countries have a pension system based on the social insurance model, where one single public pension scheme provides the bulk of retirement income to the whole resident population, or a multipillar system, where the state takes responsibility only for basic income security and additional coverage is provided by occupational and private arrangements. European pension systems are path-dependent; micromechanisms link existing institutional structures to new policies.' In particular, policymakers face different incentive structures and political pressures under different pension institutional settings. Empirically, pension

Choices, Policy Logics and Problems in the Design of Long–term Care Systems

Establishing a public, comprehensive, independent, mainly community–based long–term care system, separate from medical care and social services, can lead to the provision of more effective and consumer–oriented services, and also to a more appropriate mix of public/private financing. Of the two main approaches to financing long–term care (LTC), a tax–based model is more flexible in providing benefits according to the individual’s need, since income levels and the family’s ability to provide care will be taken into consideration, while a social insurance model is more rigid because the individual’s rights are more explicitly defined. The latter system is likely to provide more opportunities for choice, including decisions about the mix of health and social services. Policy–makers must decide which approach to take after weighing the positive and negative aspects of each, and the existing organizational infrastructure. Decisions must also be made on the practical issues of coverage, fairness, form of benefits, service delivery patterns, relationship with medical and social services, and controlling costs. With increasing pressure to contain public sector expenditures and improve efficiency, the focus of care will gradually shift from medical care to LTC, and within LTC, from institutions to housing. How to make this process proactive and planned, instead of ad hoc and reactive, is the challenge for public policy.

China: developmentalism and social security

China began its social security reform when the market‐oriented economy was first promoted in the late 1970s. Initiatives have been taken to replace the employer‐based labour insurance model with a largely social insurance model. However, it is a mistake to argue that China is pursuing a neo‐liberal agenda in its social initiatives. Instead, the state has played a major role in the process. Based on a developmental analysis, it is argued that the direction of change is generally encouraging. The emerging social insurance programme has the following advantages: it widens coverage, facilitates economic development, seeks a minimum entitlement, fosters social integration, and enhances individual participation and responsibility. The creation of an economically and socially viable social insurance programme will support the economic development of the country in the twenty‐first century.

Germany's long-term-care insurance: putting a social insurance model into practice.

A growing population of elderly has intensified the demand for long-term care (LTC) services. In response to the mounting need, Germany put into effect a LTC Insurance Act in 1995 that introduced mandatory public or private LTC insurance for the entire population of 82 million. The program was based on the organizational principles that define the German social insurance system. Those individuals in the public system and their employers each pay contributions equal to 0.85 percent of each employee's gross wages or salary. Ten percent of the population with the highest incomes have chosen the option of purchasing private long term care insurance. Provisions were made for uniform eligibility criteria, benefits based on level of care needs, cost containment, and quality assurance. Over the first four years of its operation, the system has proved financially sound and has expanded access to organized LTC services. The German system thus may serve as an example for other countries that are planning to initiate social LTC insurance systems in other nations.

Current issues in German healthcare.

Germany has developed a model of social health insurance for financing healthcare. The basic characteristics of this model are compulsory membership, income-dependent contributions paid by employers and employees, a comprehensive package of healthcare entitlements, stringent government regulation and implementation by not-for-profit health insurers--the sickness funds--which operate under public law. Since the mid-1970s, when health care cost containment gradually evolved as a new issue in German healthcare policy-making, a long series of reform programmes have been initiated. Two recent development can be noted: the introduction of market competition in health insurance and the introduction of fixed budgets. Market competition in health insurance is now an explicit policy tool in Germany. This article analyses the German healthcare system, the history of healthcare reforms and the current healthcare acts. Special emphasis is given to the German drug market and its regulation. The paper describes the present cost-containment policy for pharmaceutical products, especially the global budget concept which was introduced for medicines and patients' copayments.

Paying for Health Insurance: The Trade-Off between Competition and Adverse Selection

We use data on health plan choices by employees of Harvard University to compare the benefits of insurance competition with the costs of adverse selection. Moving to a voucher-type system induced significant adverse selection, with a welfare loss of 2 to 4 percent of baseline spending. But increased competition reduced Harvard's premiums by 5 to 8 percent. The premium reductions came from insurer profits, so while Harvard was better off, the net effect for society was only the adverse selection loss. Adverse selection can be minimized by adjusting voucher amounts for individual risk. We discuss how such a system would work. Governments are increasingly turning to market forces as a way to limit the cost of social insurance. Traditionally, social insurance programs were operated as nonmarket goods; governments mandated participation in a central program, collected revenues to finance the program, and ran the insurance system. There was no role for competition among suppliers in providing the basic benefit. As the costs of social insurance have increased, however, the centralized model of social insurance is coming under increasing strain. In the United States, for example, recent proposals have called for replacing the Medicare program with a health care voucher for the elderly [Aaron and Reischauer 1995; Cutler 1996]. The voucher would guarantee people a basic insurance plan, but the plans would be privately run. Competition among plans would generate plan premiums and enrollments. Similarly, longstanding proposals for Social Security reform have called for replacing the current system with a system of individual accounts, where people would make saving, investment, and annuitization decisions on their own [Advisory Council on Social Security 1996; Feldstein 1996]. The trend is not just domestic. In the United Kingdom the National Health Service has moved to encourage more competition in recent years, with the establishment of hospital trusts that bid for patients and partially fixed payments to physicians,

Enfermedad y previsión social en España durante el primer franquismo (1936-1951)

The campaign against tuberculosis was one of the main health tasks undertaken by the Francoist regime from the beginning of the Civil War. At the same time, the project to introduce compulsory insurance against tuberculosis was initiated, based on the Italian model of social insurance. This article analyzes the circumstances that impeded the implementation of the insurance program. One determining factor was the division of power among the different factions of the Francoist regime, which led to the introduction of compulsory health insurance by the Falangist Party. Relevant features concerning the organization and goals of the anti-tuberculosis campaign in Spain from 1936 to 1951 are also described.

Maintaining the Status Quo: The Impact of Old-Age Interest Groups on the Medicare Catastrophic Coverage Act of 1988

The Medicare Catastrophic Care Act (MCAA) of 1988 (P.L. 100-360) was the first major expansion of Medicare since its inception in 1965. Just after the legislation passed, controversy erupted, leading to the eventual repeal of most parts of the act. Using two levels of analysis, a structural elite model and a pluralist politics model, this paper demonstrates how, contrary to dominant health policy formation theories, old-age interest groups influenced the policymaking process surrounding MCCA. The importance of the transformative capacity of policy structures is emphasized in arguing that the only structural change embodied in the legislation—a departure from the social insurance model of Medicare financing—was the catalyst for mobilizing financial interests among some old-age interest groups. This mobilization resulted in a cleavage between various old-age interests, and the eventual repeal of the legislation.

Health care reform and people with disabilities.

As a group, people with disabilities or chronic conditions experience higher-than-average health care costs and have difficulty gaining access to affordable private health insurance coverage. While the Americans with Disabilities Act will enhance access by prohibiting differential treatment without sound actuarial justification, it will not guarantee equal access for people in impairment groups with high utilization rates. Health care reform is needed to subsidize the coverage of such individuals. Such subsidization can be achieved under either a casualty insurance model, in which premiums based on expected costs are subsidized directly, or a social insurance model, in which low-cost enrollees cross-subsidize high-cost enrollees. Cost containment provisions that focus on the provider, such as global budgeting and managed competition, will adversely affect disabled people if providers do not have adequate incentives to meet these people's needs. Provisions focusing on the consumer, such as cost sharing, case management, and benefit reductions, will adversely affect disabled people if they unduly limit needed services or impose a disproportionate financial burden on disabled people.

Cost-containment in Health Care: a comparison of policies in the Netherlands and England

Cost-containment in health care has become an increasingly important objective for governments in most industrialised societies, irrespective of differences in systems of finance and service-delivery. Policies for cost-containment and retrenchment in the intra-mural (hospital) sector are described and compared in two ostensibly different health care systems - the mixed social insurance model in the Netherlands, and the National Health Service in England. Close similarities are observed, but the claim that cost-control and cutbacks are more easily implemented in nationalised public systems receives some support.

Moral hazard, adverse selection, and the optimal provision of social insurance

The single-period social insurance model of Diamond and Mirrlees is extended to allow for a diversity of types (in the probability of becoming disabled). When individual type is observable, the utilitarian optimum has both consumption when working and disability benefits increasing with the probability of disability. When type is not observable (adverse selection is present), the optimum is a single ‘pooling’ policy over a wide range of welfare weights which includes the utilitarian case. These results also provide insights into the potential distributional effects of moral hazard and the ways moral hazard and adverse selection problems may interact.

A model of social insurance with variable retirement

Models are studied, in which ability to supply labour is affected by a random variable (health) not observable by government. When ill-health strikes, the consumer must retire, but he may choose to retire in any case. Optimal social insurance policies are found for one-period, two- period, and continuous-time models. It is found that, under plausible conditions, at the optimums consumers are indifferent whether to work or not, but do work when able. Insurance contributions decrease with age, and insurance benefits increase with age of retirement. It is desirable to prevent private saving. Some comments on the U.S. Social Security system are added.