What are the advantages of private insurance schemes?
• Countries with limited tax revenues and resources to spend on health can better target public funds towards vulnerable sections of the population if those who can afford it pay for themselves. In countries with a well-functioning universal coverage system, private insurance may still play a complementary role. In the Netherlands, for example, households with income above a certain level are not allowed to participate in the public insurance system and typically take out private insurance. • Private health insurance financing creates incentives for providers to improve the quality of services. • It has been argued that the regulation of insurance markets is more in line with comparative advantages of government activities than operating a quality public system of health care facilities. • When public funding of the health system is low, private mechanisms can serve as a transitional step towards universal coverage. Institutional capacities and management skills developed for private i
