Filed under: Health
It’s come to my attention that if I had moved to the Netherlands from the US this year, rather than 10 years ago, I would have saved less (in percentage terms) on my health insurance premiums. That’s because back in 1999, I was getting a low rate as a then-young healthy person; my premiums were 75% lower in the Netherlands than they had been in the US. But as of 2006, the Netherlands instituted a major systemic reform under which all health insurers must offer everyone in the country exactly the same individual rate for health insurance, regardless of age or prior medical condition. This paper in the magazine Health Affairs by two Dutch health economists explains the details. As of 2007, the average Dutch premium was about 1100 euro, rather than the roughly 600 euro I was paying back in 1999. On the other hand, each Dutch taxpayer (and I was paying taxes) now gets an income-related subsidy from the government to help reimburse health insurance premiums, and that runs up to a 1,464 euro maximum. At the same time, there’s a 7.2% payroll tax to fund the government-run Risk Equalization Fund (more on that below). Employers are required to reimburse that 7.2% fully to employees; but I was self-employed. Of course, in the US, I was paying an equivalent payroll tax for Medicaid and Medicare.
The net impact of all this is kind of hard to figure out. It’s hard to know how much the average 30-year-old would pay for insurance now in the US. The Robert Wood Johnson Foundation says the average cost of an individual policy in the US was $4118 in 2006. But a survey of policies sold through eInsuranceHealth in 2007 showed costs for individual policies ranging from $1200 to $3600 a year. And of course back in ’99 you could get 1.25 euros for your dollar; these days you can get 1.4 dollars for your euro, which makes the idea of moving to Holland to buy health insurance less attractive. And yet, even at today’s exchange rates, and even assuming I could get a decent insurance plan in the US for $2500 a year, I would save almost $1000 a year — 40% — by moving to the Netherlands, even without factoring in whatever government subsidy I got back. (My earnings that first year in Holland were, shall we say, low enough that I feel confident I would have received a substantial subsidy.)
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