Dw. Light, KEEPING COMPETITION FAIR FOR HEALTH-INSURANCE - HOW THE IRISH BEAT BACK RISK-RATED POLICIES, American journal of public health, 88(5), 1998, pp. 745-748
Objectives. This paper describes how Ireland created a level playing f
ield for competition in health insurance, the strategies of a major in
surer to introduce risk-rated policies that would segment the market,
the successful campaign to block these policies, and the policy implic
ations of the European Union requirement of competition in health insu
rance. Methods. Policy documents, interviews, and press reports were a
nalyzed. Results. The minister of health forced the commercial insurer
to withdraw its policies and replace them with community-rated polici
es. Conclusions. Because it is easier and more profitable for insurers
to engage in risk selection than to become more efficient, beneficial
competition in health insurance markets is extremely difficult to cre
ate. Carefully drawn rules and monitoring are required to overcome inh
erent causes of market failure. The current enthusiasm for saving mone
y through competitive schemes in health insurance seems likely to prod
uce higher costs and greater inequality.