Why not private health insurance? 1. Insurance made easy

Area of Science:

• Health Policy
• Health Economics
• Insurance Studies

Background:

• Canadian healthcare is primarily publicly funded.
• Proposals exist to introduce private insurance to supplement or parallel the public system.
• The financial viability and impact of private insurance in this context require examination.

Purpose of the Study:

• To assess the realism of expanding Canadian healthcare financing through private insurance.
• To analyze the implications of parallel private insurance streams and expanded supplementary tiers.
• To evaluate the compatibility of insurance principles with a mixed public-private healthcare model.

Main Methods:

• Analysis of insurance principles and market dynamics.
• Economic modeling of voluntary health insurance under different scenarios.
• Assessment of potential impacts on the publicly funded healthcare system.

Main Results:

• Voluntary private insurance is likely to attract high-risk individuals, necessitating risk-selection by insurers.
• Parallel private plans face market viability issues alongside a strong public system.
• Supplementary private plans may increase costs and offer incomplete coverage.

Conclusions:

• Expanding private insurance in Canadian healthcare is unlikely to be viable or beneficial.
• Such expansion could undermine the existing public system and fail to provide comprehensive coverage.
• Insurance principles suggest private voluntary plans would struggle to cover all necessary services cost-effectively.