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CMAJ • September 7, 1999; 161 (5)
© 1999 Canadian Medical Association or its licensors

Education
Éducation

Why not private health insurance? 1. Insurance made easy

Raisa Deber, PhD, Alina Gildiner, BSc (PT) and Pat Baranek, MA

From the Department of Health Administration, University of Toronto, Toronto, Ont.

Abstract

How realistic are proposals to expand the financing of Canadian health care through private insurance, either in a parallel stream or an expanded supplementary tier? Any successful business requires that revenues exceed expenditures.Under a voluntary health insurance plan those at highest risk would be the most likely to seek coverage; insurers working within a competitive market would have to limit their financial risk through such mechanisms as "risk selection" to avoid clients likely to incur high costs and/or imposing caps on the costs covered. It is unlikely that parallel private plans will have a market if a comprehensive public insurance system continues to exist and function well. Although supplementary plans are more congruous with insurance principles, they would raise costs for purchasers and would probably not provide full open-ended coverage to all potential clients. Insurance principles suggest that voluntary insurance plans that shift costs to the private sector would damage the publicly funded system and would be unable to cover costs for all services required.




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Can. Med. Assoc. J., September 21, 1999; 161(6): 669 - 671.
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