Health Insurance in the Netherlands.

The new health insurance system from

2006
Contents

Foreword
Introduction

1. Health Insurance Act

1.1 Background
1.2 Nature of health insurance
1.3 Persons obliged to take out health insurance
1.4 Management and administration
1.5 Health insurance agreements and care obligations
1.6 Care outside the Netherlands
1.7 Entitlements to care
1.8 Government grants
1.9 Funding
1.10 Risk equalisation
1.11 Management and supervision
1.12 Disputes

2. Health Care Allowance Act

2.1 Background
2.2 Purpose of the Act
2.3 Persons with legal entitlements
2.4 Right to the health care allowance
2.5 Implementation
2.6 Funding
2.7 Reference income
2.8 Calculation of health care allowance
2.9 Management and supervision
2.10 Disputes (objections and appeals)

3. The Exceptional Medical Expenses Act

3.1 Background
3.2 Nature of the scheme
3.3 Insured persons
3.4 Management, administration and contracts between insurers and health care providers
3.5 Registration and validation of health care entitlements
3.6 Care under the Act in other countries
3.7 Care entitlements under the Act
3.8 Government grants
3.9 Funding
3.10 Management and supervision
3.11 Disputes

4. International aspects
4.1 Background
4.2 Principles of international co-ordination
4.3 Obtaining care in other countries
4.4 Procedures at the European Court of Justice
4.5 Treaty countries

5. Related legislation
5.1 Health Care (Market Conditions) Act
5.2 Social Support Act

List of abbreviations
Acts of Parliament
Foreword

The Ministry of Health, Welfare and Sport receives many questions from the Netherlands and other
countries about the insurance of medical expenses in the Netherlands. This booklet entitled “The new
health insurance system in the Netherlands from 2006” meets the need for this information. This
eighth edition of the booklet has been completely revised.

The booklet summarises the health care insurance system existing at 1st January 2006. It also deals
with other laws related to health care insurance. Certain matters covered in the booklet are the
subject of proposed new legislation that Parliament was still discussing at the time of publication.

We wrote the booklet mainly for people with knowledge of health care insurance. However, we have
endeavoured to make it understandable for people without such prior knowledge. A Dutch edition of
the booklet is available. The text can be downloaded from the ministry’s website at www.minvws.nl by
keying in the search instruction “Health care insurance in the Netherlands”.

The Hague, 1st September 2005

INTRODUCTION

General
European countries organise, manage and finance health care in different ways. But the systems
share some common principles: universal access to care and insurance, solidarity in the distribution
of costs and a good standard of care. While considerable similarities exist in policy issues, there are
also significant differences in the way countries seek solutions. Each national system was created in
its own particular way, with policy influenced by cultural, historic and instrumental factors.

Developments in the Dutch care system

The Dutch government is committed to maintaining a health care system that provides people with
access to essential medical care of good quality. For many years the Netherlands had a fragmented
system of health care insurance for normal medical care. This was due to historical reasons. Until 1st
January 2006, a system of compulsory health care insurance covered a large section of the Dutch
population. Other people had to take out private health care insurance. Some risk groups were able to
obtain a policy covering a legally defined standard package of services. Certain groups of civil
servants were covered by special compulsory private health care insurance.

This fragmentation ended on 1st January 2006 with the introduction of a single statutory insurance
regime that covers all residents of the Netherlands. It is called the Health insurance act. The new
insurance regime was designed to contribute to the fullest extent possible to the provision of effective,
high-quality health care. The new system retains and where possible strengthens some established
rights, like the scope for private initiative, a relatively strong private law basis with accompanying
financial responsibilities for medical insurers and good accessibility.

Features of the care system

The Dutch health care system has three important features:
1. The health care insurance system comprises three compartments:
a. long-term nursing and care;
b. care with a view to cure;
c. supplementary insurances.
2. The offered care is predominantly of a private nature.
3. The health care insurance system is built on private law but incorporates strong assurances
under public law.

Insurance compartments
Three insurance compartments
Other countries have health care insurance systems that are typically subdivided into cover for
sickness and maternity on the one hand and industrial accidents and occupational diseases on the
other. The insurance of medical care required for industrial accidents and occupational diseases is
embedded in the Netherlands in insurance schemes that cover the whole population. The
Netherlands decided in 1967 to abolish separate insurances for industrial accidents and occupational
diseases in order to reduce administrative costs. In practice it often proved difficult to determine
whether the cause of the need for medical care was work-related or stemmed from the private setting.
Disputes regarding this question imposed a heavy burden on the organisation responsible for
implementing care laws and on the judiciary.

The new Dutch health care insurance system consists of three compartments. The first compartment
is a statutory insurance that covers the entire population against the costs of prolonged nursing and
care. This entitlement is embodied in the Exceptional Medical Expenses Act. The second
compartment is insurance against the costs of care with a view to cure. Everybody in the Netherlands
has a legal obligation to take out insurance to cover this kind of care. This requirement is laid down in
the Health insurance act. Together, the entitlements existing under the Exceptional Medical Expenses
Act and Health insurance act offer all members of the public adequate cover against medical
expenses. Everybody has the option of taking out supplementary insurance for types of care not
covered by the Exceptional Medical Expenses Act or Health insurance act because they can easily be
paid for by those who need them or are of a luxury nature.

Private care
Predominantly private nature of care
A characteristic feature of the Dutch health care system is that private companies offer most of the
care. Like many other Western European countries, the Netherlands has a long tradition of help and
care provided by local and regional voluntary organisations. Some of these organisations have their
roots in the Middle Ages. The vast majority of hospitals and other care institutions are privately
owned. They provide care as independent enterprises and not, as in some other European countries,
as public sector organisations. Most care institutions continue to provide services on a non-profit
basis, whereas individual care providers usually operate with a view to making a profit.

Public and private insurance

Hybrid insurance under public and private laws
Private companies that are allowed to make a profit render care services focused on cure. However,
Dutch lawmakers have imposed several conditions to safeguard the social nature of the insurance.
This puts this element of public health care insurance in an area in between traditional social
insurance and private insurance. Insurance for long-term nursing and care continues to be organised
as traditional social insurance, however. It is carried out by implementing organisations under the
Exceptional Medical Expenses Act (these are care insurers that have registered for providing services
under the Act), but there are plans to modernise this insurance.

Future
Care system of the future
The Dutch care system is at a crucial crossroads. The general development is that members of the
public, care providers and care insurers will get greater responsibilities, must be more cost-conscious
and will be confronted by the effects of these circumstances in terms of care and insurance. The
government’s measures are designed to keep care accessible and affordable for everybody against a
background of an ageing population and the increasing technological possibilities in the medical field.

The introduction of the Health insurance act and the Health Care Allowance Act on 1st January 2006
is unlikely to be the final word on the restructuring of the Dutch health care insurance system.
Significant amendments are still expected to the Exceptional Medical Expenses Act. The key question
is how the Act can be carried out as effectively as possible in the longer term. The government will
adopt a position on this matter in 2006 based on research currently in progress. However, the
government has already decided that from 1st January 2007 some elements of mental care will be
removed from the Exceptional Medical Expenses Act and accommodated in entitlements under the
Health insurance act. The transfer of some types of mental care will remove the financial partitions
between elements of curative care and will establish greater cohesion.

The government further intends to introduce the Social Support Act. This law will transfer to local
authorities responsibility for elements of care currently covered by entitlements under the Exceptional
Medical Expenses Act.

Figures
Overview of the care sector
One million people in the Netherlands work in the care sector (some of them part-time).
Approximately 15.8 million people out of a population of 16 million had some form of health care
insurance at 31st December 2005. Most of the people in the category without health care insurance
are very affluent people who do not want cover, people who until introduction of the Health insurance
act on 1st January 2006 had to take out private health care insurance but had their policies cancelled
for non-payment of premiums and persons in the Netherlands illegally. Homeless people are a special
group. They were covered by social insurance in principle but failed to register for it. A small group of
uninsured persons is made up of people who at the reference date were changing from one insurer to
another, i.e. they had cancelled their policy with one company but had not yet registered with another.
Military personnel and imprisoned persons receive medical care from the Ministry of Defence and the
Ministry of Justice, respectively.

Approximately €46 billion circulated in the care sector in the Netherlands in 2005. The table below is a
breakdown of spending according to the principal care sectors (in millions of euros).1

1
Source: State Budget 2005, Ministry of Health, Welfare and Sport, including care policy, Budget XVI.
Expenditure in the care sector in 2005 million euros
Prevention and healthcare protection 236
Curative care 17,304
Medicines and medical technology 4,463
Care for the mentally ill, care for addicts and shelters
in the community 3,582
Care under the Exceptional Medical Expenses Act 1,360
Care for the disabled and medical aids 5,832
Nursing, care and the elderly 11,240
Administration of health insurance schemes and
miscellaneous expenses 1,258
Nominal costs and contingences 620
_______
Total 45,895

Approximately 30 care insurers provide services under the health care insurance system. Some
operate nationwide, others serve only a certain region of the country.
1. Health Insurance Act

1.1 Background
Discussion of system
The Health Insurance Act came into force on 1st January 2006. It ended a decades-long discussion
about abolishing the distinction between private health care insurance and compulsory insurance with
health funds. In recent years the discussion had centred on whether the new insurance system should
be one under private law with public law features or one under public law with private features. The
only difference in legal terms is that private insurance is established by a person and an insurer
concluding an agreement with each other. Statutory insurance (i.e. insurance under public law) is
established by a person meeting the conditions laid down by law, such as being an employee with an
annual salary below a certain level. Supporters of the private law approach saw the statutory
approach as raising the spectre of excessive government regulation that would obstruct efficient
insurance. Advocates of the statutory approach regarded the private variant as a threat to the
solidarity required for social insurance. The discussion was dominated by concerns about the
direction a new health care insurance system might take. Some feared that insurance organised
under public law would over time assume an increasingly statutory nature with all the perceived
government involvement. Others feared that insurance organised under private law would ultimately
develop into purely private insurance without the solidarity needed for social insurance.

In its second term of office, the coalition cabinet formed by premier Jan-Peter Balkenende opted for
the private approach to health insurance regulated by law, but with strong statutory safeguards. The
cabinet saw this as the best way of clarifying the division of responsibilities between government,
public and medical insurers. The cabinet considered it a responsible approach because it created
social insurance with scope for entrepreneurship in the care sector. But the system would be
embedded in a robust legal framework with statutory assurances. It is an approach that amalgamates
the social tradition of the health insurance fund and the market tradition of private insurance.

History of plans
Earlier attempts at bringing about reforms were all based on a system under public law. The most
well-known plans are the Hendriks Plan (1974), Dekker Plan (1987) and Simons Plan (1992). These
efforts failed for a variety of reasons. The second Balkenende cabinet agreed in the coalition accord
of 16th May 2003 to introduce a compulsory standard insurance for the entire population. In a letter
sent to the Lower House of Parliament on 19th December 2003 (Parliamentary Papers II 2003/2004,
23 619, No. 20), the Minister of Health, Welfare and Sport observed that health insurance funds and
private medical insurers had converged significantly in recent years. The cabinet considered it a
logical step in this development to bring together the different types of insurances in the Netherlands
into one broadly-based standard insurance package for the entire population. The package covers the
risks of medical care, medicines and medical aids to the same extent that prevailed under the health
insurance fund system. The basic insurance has social safety nets. At the same time, the cabinet is
keen to promote effectiveness and freedom of choice. It has declared its preference for risk-bearing
insurance provided by private insurance companies.

System under private law

The decision by the second Balkenende cabinet to organise insurance under private law was not
without legal complications. The European directives covering non-life insurance (“Non-life Directives)
prohibit governments from imposing statutory regulations on private insurance in respect of the
person they accept, the extent of cover and the premiums payable. This prohibition exists to ensure
that insurance companies in Europe compete with each other on an equal footing without one insurer
being disadvantaged in relation to another because of government regulations that curtail its freedom
of enterprise.

Yet the Dutch cabinet chose to incorporate statutory safeguards to protect the social nature of health
care insurance precisely in the fields covered by the European prohibition of government regulation.
The government has made it obligatory for a medical insurer to accept anybody who applies for
insurance and to offer everybody the same insurance cover under the same terms and conditions. An
insurer is not allowed to charge different premiums to persons it insures for the same range of
services. Dutch lawmakers justify this apparent breach of EU rules by invoking the exception clause in
Non-life Directives. The clause stipulates that the Non-life Directives do not apply to insurance
schemes that fully or partly replace social insurance. The Dutch cabinet considers the exception
applicable because the new insurance system will replace the health insurance funds. Moreover, the
cabinet takes the view that, in the final instance, it is possible to seek recourse to the public interest
as justification for departing from European rules.

The decisive factor for the second Balkenende cabinet was a letter from the European Commission
dated 25th November 2003. In response to questions raised by the Dutch cabinet, the letter stated that
the planned private law embodiment of the new insurance system could be deemed possible under
European law, provided that government regulation did not go beyond what was strictly necessary
and did not intervene more than necessary in the insurance market.

Another consideration was a trend in jurisprudence at the European Court of Justice. Case law
appears to indicate that the court draws a less strict dividing line than in the past between the free
market on the one hand and social security organised under public law on the other. The court
apparently sees scope for assuring the public interest through certain kinds of government
interventions in the private market2. Based on these facts, the cabinet developed the Act governing
social insurance for medical care for the entire population (“Health Insurance Act”).

Health Insurance Act

The Health Insurance Act makes it mandatory for everybody who resides or pays payroll tax in the
Netherlands to take out health insurance. Every health care insurance company in the Netherlands
that has stated that it will provide services under the Act has a legal obligation to accept anybody who
applies for insurance.

The Health Insurance Act defines insurance cover according to types of care. The care insurer may
decide which qualified person or institution will provide the insured care. Similarly, the insurer may
decide whether to provide the insured care to insured persons in kind or through reimbursement of
costs they pay to the care provider they chose (also refer to section 1.6). In the latter case, the insurer
has an obligation to help insured persons find available care if they request such assistance. It is also
possible for the insurer to offer some types of care in kind and others through reimbursement.

An insurer must always offer insured persons an insurance option without a personal excess. The
insurer may offer a number of legally defined tranches of personal excess. People may choose any
variant of insurance offered by the insurer. They may switch variant and insurer from year to year.

An insured person pays a nominal premium directly to the insurer and also an income-related
contribution. The insurer decides the size of the nominal premium. Insured persons up to 18 do not
pay the nominal premium. The Health Insurance Act includes a no-claim refund system. People who
use little if any care get back some of their nominal premiums from their insurer.

The Inland Revenue Service levies the income-related contribution. Employers are required to
reimburse their employees in full for these contributions. With a few exceptions, people drawing social
security benefits are also entitled to reimbursement of these contributions from the authorities that
administer their benefits. It is up to a pension administrator to decide whether to reimburse retired
persons for all or part of the income-related contribution. The income-related contributions are
deposited in the Health Insurance Fund along with a government contribution equal to the missed
nominal premiums of insured persons younger than 18. One of the purposes of this fund is to pay
insurers amounts related to the degree of risk of the people they insure.

Health Care Allowance Act

The Health Care Allowance Act took effect at the same time as the Health Insurance Act. Under the
Health Care Allowance Act, people receive an allowance if the nominal premium is excessive
compared with their income. The Inland Revenue Service pays out the allowances. The income of a
person’s partner is taken into consideration when determining whether somebody qualifies for an
allowance.

Abolition of various acts, schemes for civil servants and private insurance
The Social Health Insurance Act, the Medical Insurance (Access) Act 1998 and the
Overrepresentation of Elderly Health Insurance Act Beneficiaries (Joint Financing) Act were revoked
2
See judgements of the European Court of Justice in the cases of Commission vs. Belgium (C-206/98), Commission vs.
France (C-239/98), Commission vs. Italy (C-59/01) and Commission vs. Luxembourg (C-346/02).
on 1st January 2006. Insurance through health insurance funds and insurance under the Medical
Insurance (Access) Act no longer exist.

Private health care insurance and public law schemes for health care insurance for civil servants have
been discontinued insofar as the insurance package is covered by that of the Health Insurance Act or
foreign insurance that applies under EU Regulation No. 1408/71 of the Council of 14th June 1971 on
the application of social security schemes to employed persons, to self-employed persons and to
members of their families moving within the community (“Council Regulation”), or the European
Economic Area (EEA) agreement, the agreement between the European Community and its member
states on the one hand and the Swiss Confederation on the other on the free movement of persons,
or bilateral social security treaties with other countries that include reciprocal arrangements for
providing medical care.

1.2 Nature of health insurance

Insurance obligation
Under the Health Insurance Act, all residents of the Netherlands and non-residents who are liable to
Dutch payroll tax are required to take out health insurance with a health insurer. The insurance is not
established automatically simply by a person meeting the criteria, as is the case with insurance under
the Exceptional Medical Expenses Act. This is because a person must choose an insurer and
conclude an insurance agreement. For their part, the care insurers are under obligation to accept
anyone who applies for insurance.

Legal status under private law

Health insurance is organised under private law. The insurance is established by concluding an
insurance agreement. In principle, the government is not involved in the insurance and, anyway,
European rules prohibit such involvement. The Health Insurance Act lays down rules – proportionately
– only for matters that require government interventions because of the public interest. This includes
imposing an acceptance obligation on insurers, the obligation for them to offer people the same
insurance variant for the same premium, and a statutory definition of the insurance cover. Against
these obligations the insurers receive financial equalisation for the services they are required to
provide (refer further to section 1.10). The care insurers are subject to the same rules applicable to
the entire insurance market. Consequently, they are “normal” private companies that are allowed to
make a profit and that are subject to the competition laws applicable to enterprises.

Social health care insurance

The Health Insurance Act provides for social health care insurance for the entire population. This
makes the Council Regulation applicable and also the European Economic Area (EEA) agreement,
the agreement between the European Community and its member states on the one hand and the
Swiss Confederation on the other on the free movement of persons, or bilateral social security treaties
with other countries that include reciprocal arrangements for providing medical care.

1.3 Persons obliged to take out health insurance

General rule for compulsory insurance

Every person insured under the Exceptional Medical Expenses Act required to take out health
insurance.
The people insured under this Act are those that reside legally in the Netherlands or live in another
country but work in the Netherlands and pay Dutch payroll tax. Refer to section 3.3 for the categories
of people who must have this insurance. Many people take out their own health insurance, but
somebody else can do it for a person under obligation to have insurance. For example, a person can
take out insurance for his/her partner or children. An employer can do it for its personnel. For persons
who cannot or may not personally conclude an insurance agreement (like minors), the arrangements
must be made by a legal representative, guardian, family member or authorised agent.

Exemptions from the insurance obligation

The government has made two exceptions to the general rule that people compulsorily covered by the
Exceptional Medical Expenses Act are required to take out insurance under the Health Insurance Act.

Military personnel
Members of the armed forces on active service are insured under the Exceptional Medical Expenses
Act but do not have to take out insurance under the Health Insurance Act. They receive care from the
military medical services. This cover applies outside working hours as well as during deployment in
the Netherlands and abroad. The Ministry of Defence is able to provide care on a scale that ensures
optimum services under all circumstances to safeguard the health and deployment of members of the
armed forces. This would not be possible under the Health Insurance Act. Therefore, military
personnel have no obligation to take out insurance under the Health Insurance Act.

Conscientious objectors
Another exception to the insurance obligation has been made for people with conscientious
objections. Those who object to insurance on principle pay no premiums under the Exceptional
Medical Expenses Act. Nor are they required to take out insurance under the Health Insurance Act.
However, they do owe the income-related contribution in the form of a substitute tax. This extra tax
paid by conscientious objectors is placed on a separate account held with the Health Care Insurance
Board. A conscientious objector may use the balance to pay for the costs of care similar to that
covered by health insurance.

1.4 Management and administration

Care insurers
Private health care insurance companies carry out the provisions of the Health Insurance Act. The
insurers have been termed “care insurers” because the government wants them to act as effective,
customer-driven organisers of care for the people they insure. A key objective of social insurance
under the Health Insurance Act is to enable members of the public to receive the care they need. The
care insurers, in their capacity as the administrators of the health insurance, play an important role in
fulfilling that objective. Their role is not confined to paying the costs of provided care. Above all, they
must ensure that insured persons can get care for which they are insured. This care obligation
consists of supplying the insured care a person needs (the in-kind variant) or reimbursing the costs
the person incurs for obtaining the care and, on request, undertaking activities to procure such care or
services (reimbursement variant). Care insurers are required to establish an accounting system that
satisfies the regulations for providing financial equalisation (also refer to section 1.10).

A basic principle of social insurance is that insured persons must be able to exert influence on the
policy of the company that insures them. This principle has been embodied in various international
treaties ratified by the Netherlands. The treaties set standards for the form and content of social
insurance. A care insurer’s articles of association must ensure that insured persons possess a
reasonable degree of influence over the company’s policy. This approach is aligned to the corporate
governance concept favoured by the Dutch government.

Conditions for implementing the Health Insurance Act

Licence from the Dutch central bank
Health care insurance companies that operate in the Netherlands are not obliged to provide services
under the Health Insurance Act. Dutch and foreign health care insurance companies have the right to
decide whether or not they wish to carry out the Act’s provisions. If they choose to do so, they must
hold a licence for the performance of non-life insurance services for the correct sectors (i.e. 1.
accidents including industrial accidents and occupational diseases and 2. sickness). These licences
are issued by De Nederlandsche Bank (DNB), the Dutch central bank, or by a sister regulator of DNB
in another European Union member state.

Registration with the Supervisory Board for Health Care Insurance (CTZ)
Health care insurance companies must additionally be registered with the CTZ to allow supervision of
the services they provide under the Health Insurance Act and to qualify for payments from the
equalisation fund.

Area of activity
A care insurer must provide services and offer health insurance throughout the Netherlands unless it
insures fewer than 850,000 people. In that case, the care insurer may confine its area of activity to
one or more entire provinces of the Netherlands. The law does not allow care insurers to operate in
parts of provinces. The government has imposed these conditions to promote competition between
“large” care insurers while offering a possibility for new market entrants to establish a footing in a
limited area of activity.

1.5 Health insurance agreements and care obligations

Health insurance agreement

A person must take out health insurance with a care insurer within four months of establishment of the
insurance obligation in order to comply with the law. He/she may conclude the agreement with any
care insurer in the province where he/she lives or works. A person will wish to consider various
matters when choosing a care insurer. They include the form in which the insurance is offered (in kind
or reimbursement; see below under the heading “Care obligation”), the different levels of low risk
offered by the care insurer, the nominal premium that is payable for them and the services available
from the insurer. People with an obligation to take out insurance may use initiatives like an internet
website – www.kiesBeter.nl – that provides an overview of all care insurers, their terms and conditions
and their offerings. This website also provides comparisons of the model agreements of care insurers.

Supplementary insurance
If desired, a person may take out supplementary insurance in addition to health insurance. The
supplementary insurance is unrelated to the health insurance. It is private insurance for which the
government is not allowed to impose any rules other than those existing under the general
supervision of the insurance industry by the Dutch central bank (DNB). An insurer is therefore under
no obligation to accept a person for supplementary insurance. Private health care insurance
companies determine the scale of the supplementary cover they offer and the level of the premiums.

Cancellation of supplementary insurance not allowed when people change insurer

The Health Insurance Act does stipulate, however, that a care insurer is not allowed to cancel
supplementary insurance if a person decides to take out health insurance with a different care insurer.

Penalties for concluding health insurance late

Fine
If a person fails to meet the insurance obligation or to meet it on time, the individual care insurers will
impose a fine on behalf of the Health Care Insurance Board if the person subsequently applies for
health insurance. A person who takes out health insurance late will owe, besides the premium for the
insurance, a fine equal to 130 per cent of the nominal premium for the health insurance. The fine is
payable over the number of months that somebody was not insured (subject to a maximum of five
years).
No fine
No penalty will be imposed if a person is not to blame for the failure to take out health insurance or if a
justification exists for not doing so. This will be the case, for example, if a person did not take out
health insurance on time because of a psychiatric disorder. If imputable grounds exist for the failure to
obtain insurance, the size of the fine can be reduced if a person can show that it is too high on
account of exceptional circumstances. During the period of non-insurance, a person obviously has no
entitlement to reimbursement of costs incurred for care or to the health care allowance (refer to
section 2). But a person under obligation to have insurance will always owe the income-related
contribution over salary or equivalent income components, even if the person did not take out
insurance.

Acceptance obligation
Every care insurer is under obligation to accept any applicant for health insurance that it provides in
the applicant’s province. The care insurer is not allowed to differentiate the premium according to
personal characteristics like age, gender or medical situation. Insurers receive compensation for the
acceptance obligation in the form of an equalisation scheme that makes good any financial
disadvantage they incur (refer to section 1.10).

Term
An insurance agreement has a term of one calendar year. The agreement may be renewed tacitly, but
if desired the insured person has the right after one year to choose a different care insurer or different
model agreements. The person must inform the care insurer in good time of the decision not to renew
a contract. It is possible to change to a different care insurer before expiry of a calendar year if an
insurer raises its premiums in the course of the year.
Policy
The care insurer is required to issue a care policy every year to every insured person as proof of the
existence of the health insurance agreement. The policy sets out the content of the health insurance
agreed with the insured party (in terms of rights and obligations).

Information obligation
A person who takes out health insurance has a legal obligation to inform the care insurer immediately
of all facts and circumstances that may result in the ending of the insurance. These could include, for
example, discontinuation of the insurance obligation due to circumstances like a move to another
country or move to a place outside the care insurer’s area of activity. The Health Insurance Act
stipulates that the insurance will end in circumstances like these. For its part, the care insurer has an
obligation to provide information to the people it insures. This applies, for instance, if a redrawing of
the insurer’s area of activity means that they no longer live in the area of activity.

Care obligation
Care obligation
Making sure that people can obtain the care they need is a key objective of the Health Insurance Act.
As the parties that provide services under the Act, the care insurers play an important role in
achieving that objective. Their role is not confined to payment of costs. Above all, they must make
sure that people are able to obtain insured care. This is referred to as the care obligation.

An insured person is entitled to care under the following models:

In-kind model
1. The care insurer provides insured care needed by the insured person through its own care
providers or through care providers that it has contracted. The care provider receives payment directly
from the care insurer. This is called the in-kind model. An insured person is free to choose from any of
the insurer’s own or contracted doctors or hospitals. If a person wishes to receive care from a
different, uncontracted care provider despite his/her decision to take a policy with contracted care, the
care insurer will decide the level of cost reimbursement that it will award. This allows the care insurer
to on-charge the costs it has incurred by contracting care to insured persons who choose an
uncontracted care provider. However, the insurer is not allowed to set the reimbursement so low that
it would in effect make it impossible to obtain uncontracted care.
Reimbursement model
2. Under the reimbursement model, a person receives care from a care provider with whom the care
insurer has no contractual relationship. The insured person pays for the provided care and receives
reimbursement of the costs from the care insurer. The care insurer is not allowed to set a maximum
for the reimbursement, but has no obligation to reimburse a person more than is reasonable by
prevailing market standards in Netherlands. An insured person can use the care provider of his/her
choosing. If the care insurer does not offer the required care through its own or contracted care
providers, it has an obligation to help the insured person find the care if requested to do so. This kind
of assistance can vary from making a simple telephone call to conducting talks with a care provider to
ensure the insured person receives care.

Combination of in-kind/reimbursement models

Different kinds of variations are possible within the models outlined above. They include a
combination of the in-kind and reimbursement models whereby the care insurer provides some of the
insured types of care through its own or contracted care providers and others under the
reimbursement model.

By offering these models, a care insurer is able to tailor its services to fit the wishes of the people it
insures.

1.6 Care outside the Netherlands

Worldwide care
The Health Insurance Act provides worldwide cover. No matter where they are in the world, insured
persons are insured in exactly the same way as they are in the Netherlands. The cover is for the
Dutch package of services under the Dutch terms and conditions and tariffs. An insured person may
choose to have the cover under a reimbursement policy, in-kind policy or combination thereof.
The rights of an insured person who obtains care under his/her health insurance agreement depend
on the type of policy.

Care obtained under health insurance

Reimbursement policy
An insured person who has opted for a reimbursement policy has the right to go to any care provider
in a foreign country. It makes no difference whether the care provider is or is not established in an
EU/EEA member country or a treaty country. The insured party with a reimbursement policy will be
entitled to reimbursement of the costs of obtained care. However, this does not necessarily mean that
the person will in all instances be reimbursed for the full amount of the costs of care. Under the Health
Insurance Act, the care insurer is not under obligation to reimburse more than the prevailing market
rates payable for similar care in the Netherlands. When obtaining care in a foreign country, an insured
person should check whether the care is included in cover under the Health Insurance Act.

In-kind policy
If an insured person has an in-kind policy, he/she will usually have to use care providers contracted
by the insurer. The insurer may contract care providers in the Netherlands and in other countries.
Therefore, a person may obtain care abroad under an in-kind policy, provided that the insurer has
contracted care providers in the country concerned. But the law allows an insured person with an in-
kind policy to go to an uncontracted care provider in the Netherlands or abroad. The consequence of
such a decision is that the insured person will not be entitled to full reimbursement of the costs of the
received care. The insurer is allowed to determine the size of the reimbursement. When obtaining
care in a foreign country, an insured person should check whether the care is included in cover under
the Health Insurance Act.

Combination of reimbursement/in-kind models

As mentioned above, a care insurer may offer a combination of these two types of policies. The
variant specified in the policy for the type of care concerned will apply.

Treaty arrangements
Obtaining care under treaty arrangements
The paragraphs above described a situation in which an insured person obtains care outside the
Netherlands under the policy model that he/she has chosen. In a treaty country, however, the person
may also obtain care under international social security arrangements. In the member states of the
European Union and European Economic Area and in Switzerland, every insured person who is
entitled to medical care under the Council Regulation, the EEA agreement and the agreement
between the European Community and its member states on the one hand and the Swiss
Confederation on the other on the free movement of persons can obtain from his/her insurer a
European health care insurance card that on presentation provides entitlement to care needed during
temporary stays. Subject to the insurer’s permission, a person is also able in the EU, EEA and
Switzerland to obtain medical care in other countries. During temporary stays in the other treaty
countries, an insured person is entitled to obtain immediate essential medical care under certain
conditions. Care obtained in another country under a treaty will be provided under the same terms
and conditions applicable to residents of the country concerned. Medical help chargeable to the Dutch
insurance system is obtainable under international agreements by family members living abroad of
people who work in the Netherlands and by persons (and their family members) who live abroad on a
Dutch pension but do not have health care insurance under a retirement pension in their country of
residence (also refer to section 4, International Aspects).

1.7 Entitlements to care

Cover
Cover under the Health Insurance Act provides for essential care. The care is checked against its
demonstrable effect, cost effectiveness and the need for public financing. Upon its introduction on 1st
January 2006 the Health Insurance Act will provide an equivalent level of cover that existed under
health fund insurance, social health care insurance for medical care for employees, people receiving
state benefits and people aged 65 and older with an income up to a certain level. It is necessary to
check the insured cover against these criteria from time to time to determine whether certain types of
care need to be removed from or added to the package. The objective is to keep cover affordable now
and in the years ahead.

Functional entitlements
The care system in the Netherlands has been organised in a way that will reduce direct government
involvement in the offering of care. Within frameworks defined by law, the players in the care field
have more freedom of choice, more policy scope and more decision-making latitude and also greater
incentives for competition. One of the instruments used to achieve this situation is the “functional
description” of the care covered by the insurance package. The functional description means the
government lays down legal requirements only for what entitlements cover (i.e. the content and extent
of cover) and when entitlements exist (the medical indications). It is the responsibility of the care
provider to decide who provides the care and where. The insurer must include these arrangements in
the care agreements that it concludes with care providers. The care agreement must also state the
procedural conditions, such as requirements for obtaining permissions, referrals and prescriptions.

The functional description gives insured parties, care insurers and care providers scope to tailor the
insurance cover to fit the frames defined by law. This approach meets the wish of insured persons,
care insurers and care providers for the government to step away from regulating everything centrally
and instead to provide incentives for tailoring services in their own way. It is an approach that allows
bespoke care policies.

Insurance package

Medical care
Medical care embraces care as provided by general practitioners, medical specialists, clinical
psychologists and midwives. This does not necessarily mean that the care must be provided by these
persons. Other parties may provide types of care that are not reserved treatments subject to
registration and title protection under the Individual Health Care Professions Act. This care includes
the associated laboratory tests and nursing. It further includes advice on hereditary diseases, non-
clinical haemodialysis, chronically intermittent respiratory treatment and assistance rendered by a
thrombosis prevention unit. Equipment used for non-clinical haemodialysis and chronically intermittent
respiratory treatment is covered by the rules applicable to medical devices.

Types of care as typically offered by medical specialists may be excluded from reimbursement. An
insured person may be required to pay a contribution towards a psychotherapy session or a session
of primary psychological care. It is possible to stipulate that the insured person must pay a
contribution up to the maximum allowed under the regulations.

Mental health care (including primary psychological care) will be financed under the Health Insurance
Act from 1st January 2007. This kind of care will still be covered by the Exceptional Medical Expenses
Act in 2006. Primary psychological care will not yet be part of the social health care insurance
schemes in 2006.

Paramedical care
Paramedical care includes physiotherapy, remedial therapy, speech therapy, occupational therapy
and dietary advice. The entitlements of insured persons aged 18 and older to physiotherapy and
remedial therapy are confined to treatment of chronic disorders. The entitlements exclude the first
nine treatments for each disorder. Insured persons younger than 18 are entitled to nine treatments
per year for each disorder. This entitlement may sometimes be increased by another nine treatments.

Speech therapy must be provided for medical purpose with the likelihood of recovery or improvement
of the speech function or speech capability. Occupational therapy must be provided with the aim of
promoting and restoring the self-care and self-help of the insured person and is confined to a
maximum of ten treatment hours per year. For dietary advice there is an entitlement to reimbursement
of up to four hours of treatment per year. The advice must be provided by dieticians and be for
medical purposes concerning nutrition and eating habits.

Maternity care
This concerns care for mother and baby for up to ten days after childbirth.
Pharmaceutical care
Pharmaceutical care consists of medicines and foods provided for medical purposes. The medicines
covered by the insurance are divided in principle into groups of medicines that are therapeutically
interchangeable. The maximum reimbursement for such a group is set on the basis of the average
price of the medicines in the group. An insured person who chooses a medicine that is more
expensive must pay the difference. There is no reimbursement limit for a medicine that is included in
the cover but is not substitutable by other medicines. This system is called the “Medicines
reimbursement system”. With a view to the orchestration role that care insurers play, they are allowed
to limit the reimbursable medicines to those they designate in each group. The definition of the care
explicitly states that care insurers will designate medicines (subject to conditions). This was done to
give extra emphasis to the role of care insurers.

Medical devices
The medical devices covered by the insurance are mainly those that people use at home. The content
of the cover varies from personal care items (like incontinence materials and diabetes test strips) to
equipment like hearing aids and orthopaedic footwear.

Insured persons are entitled to efficiently functioning devices appropriate to their limitations. Under the
Health Insurance Regulations, insured persons do not require the care insurer’s prior permission or
guidance from a professional practitioner to obtain medical devices. Nor do the regulations contain
any other procedural stipulations, like rules for the period of use of the medical device, rules for its
replacement, modification or repair or rules for the quantity of devices.

Care insurers are allowed to impose in their insurance regulations further conditions for obtaining
medical devices (i.e. procedural conditions). However, it is not the intention for insurers to lay down in
their regulations any conditions for the usage periods or quantities of medical devices (material
conditions). The insurers have been given authority to set procedural conditions to allow them to
deliver more care on a bespoke basis.

The Health Insurance Regulations give care insurers a possibility to provide medical devices on loan
or to transfer ownership to the recipient. This stipulation has not been formulated explicitly in the
Health Insurance Regulations, but is one of the effectiveness criteria a care insurer is required to
consider.

The entitlement to medical devices does not cover reimbursement of energy costs like the use of
electricity, batteries and chargers. However, the equipment is initially delivered ready for service,
complete with any batteries that may be required. Energy costs of certain medical devices that do
qualify for reimbursement will be explicitly stated.

Mouth care
Besides regular check-ups, young people under 18 have a right to fluoride treatment not more than
twice a year from age six and to sealing and periodontal care. Mouth care for insured persons above
18 is confined to specialised surgical dentistry (oral surgery), the associated X-rays and dentures.
People with an exceptional dental disorder, a physical or mental disability or special dental problems
resulting from medical treatment are entitled under special conditions to complete dental care.

Accommodation
Stays in care institutions considered necessary for the provision of medical care are confined to an
entitlement of 365 days. The costs after 365 days are charged to the Exceptional Medical Expenses
Act (refer to section 3.7). Stays under the Health Insurance Act include entitlement to nursing and
tending, but this does not necessarily have to be provided in a healthcare institution.

Transport of patients
Patients who are entitled to transport are carried by ambulance, taxi or private car provided that
transport occurs on medical indication. The doctor treating the patient is required to issue a transport
certificate. The entitlement further includes the costs of public transport in the lowest class to and from
a healthcare institution. In certain cases the care insurer may agree to special modes of transport like
a helicopter. An insured person is first required to pay a certain amount per 12 months for travel by
public transport, taxi or private car. The costs of travel by private car are reimbursed through payment
of an amount per kilometre.
The right to transport in a vehicle in which the patient is carried in the normal sitting position is
confined to four situations. These are kidney dialysis, chemotherapy/radiotherapy, visually disabled
people who are unable to travel unaccompanied, and wheelchair users. Reimbursement is limited to a
travelling distance of 200 kilometres (one-way journey). Travel over longer distances is allowed for
patients who, with the care insurer’s prior consent, receive insured treatment from a healthcare
institution or care provider located farther away (within or outside the Netherlands).

The insurance includes a hardship clause under which insured persons who do not fall into any of the
categories described above nevertheless receive reimbursement. This may be the case, for example,
if an insured person requires transport for a prolonged period of time to receive treatment for a
prolonged illness or disorder.

Limitation of entitlements in the event of terrorism

Terrorism
The Health Insurance Act limits cover for acts of terrorism to a legally defined maximum amount that
makes allowance for other types of cover like building insurance.

1.8 Government grants

Grants
Grants are awardable only for care or services that are due to be included in the insurance cover. The
Health Insurance Act stipulates that the grants are of a temporary nature. The Health Care Insurance
Board is the body that disburses grants, sometimes in association with care insurers. The grants are
charged to the Health Insurance Fund. The Minister of Health, Welfare and Sport has power to
impose a ceiling on each category of grants.

1.9 Funding

Cover for the costs of health insurance

The costs of the health insurance are covered by the nominal premiums, income-related contributions
and public funds.

Nominal premium
Nominal premium
All insured persons aged 18 and older who have taken out health insurance pay their insurer a
nominal premium. The premium is unrelated to the person’s income. Care insurers may set their own
premiums. Premium levels may differ for different variants of the insurance agreements they offer, but
they must be the same for everybody who chooses the same variant. So if an insurer offers health
insurance under which all care is provided in kind, every member of the public who takes that
particular insurance model from that insurer pays the same nominal premium. If the same insurer
additionally offers health insurance under the reimbursement model, the nominal premium for that
model may be different, but it must be the same for everybody who takes that model from that insurer.
The only exception to the prohibition of premium differentiation is the possibility that exists at law to
conclude collective insurance schemes. Under these schemes, an insurer may offer a premium
discount not exceeding 10% of the base premium payable for a variant of the health insurance.

Competition
In two respects the nominal premium provides an incentive for providing effective care. Care insurers
are able to distinguish themselves from their competitors on price. A care insurer that runs its
business and purchases care effectively will be able to offer attractive premiums. Additionally, the size
of the premium makes insured persons more conscious of the costs of care. The intention is to get
patients who use care services to adopt a critical stance towards their price and quality.

Income-related contribution
Income-related contribution
Besides receipts of nominal premiums, the Health Insurance Act is financed by levying an
income-related contribution payable by persons under legal obligation to take out insurance. These
contributions cover 50% of the total macro premium burden. People who have an obligation to
conclude insurance owe the income-related contribution over income from present and past paid
employment. The Inland Revenue Service collects the contributions. Employers deduct the income-
related contribution from the part of an employee’s salary that is subject to payroll tax. The body that
administers social security payments does the same for people who receive state benefits. The
contributions are remitted to the Inland Revenue Service. People who are under obligation to take out
insurance but do not have income subject to payroll tax receive an assessment from the Inland
Revenue Service for their income-related contributions.

Employer’s allowance
Allowance paid by employers to employees
The Health Insurance Act imposes an obligation on employers to compensate employees for the
income-related contribution if they are required by law to take out insurance. The obligation to provide
this compensation also applies to certain bodies that administer social security benefits. This will be
the case if people drawing state benefits owe the income-related contribution over certain types of
benefits (yet to be designated).

The employer’s allowance towards the costs is based on its responsibility towards its employees
under civil law for such matters as costs of medical care necessitated by circumstances arising from
their employment. This obligation has not been embodied in the Health Insurance Act for self-
employed persons and retired persons who are under obligation to take out insurance.

Public funding
Children’s premiums and other state disbursements
The state makes several disbursements under the Health Insurance Act to help finance the insurance.
Among other things the state provides funds to help pay for the premiums of children up to age 18. A
possibility exists for the state to pay part of the costs arising from hostilities like war or terrorism. The
Health Insurance Act further provides for disbursement of public funds if a care insurer is unable to
meet its financial commitments.

Health Insurance Fund

The income-related contributions and the amounts provided by the state are paid into a fund called
the Health Insurance Fund. The Health Care Insurance Board administers the fund. The principal
sources of income are the income-related contributions that the Inland Revenue Service collects from
insured persons. Another important source is the state’s annual contribution towards financing of the
insurance of people younger than 18. The contributions the Health Care Insurance Board receives
from persons living abroad who have entitlements under treaties are also deposited in the Health
Insurance Fund. There is also the income that the Netherlands receives because foreign nationals
with rights under treaties have entitlements in the Netherlands that are chargeable to a treaty country.

Care insurers receive payments from the Health Insurance Fund to compensate for any financial
disadvantage they incur through imposition of the obligation to accept anybody who is under legal
obligation to take out insurance (refer to section 1.10, “Risk equalisation”). The Health Insurance Fund
is also used to make payments such as grants and the amounts the Netherlands pays other countries
because insured persons or people with rights under treaties have entitlements in a treaty country that
are payable by the Netherlands.

Financial consequences for insured persons

No-claim refund
The Health Insurance Act has other financial consequences for insured persons besides their income-
related contributions and nominal premiums. Firstly, there is a no-claim refund scheme for insured
persons aged 18 and older. People who use little if any care services get back part of the nominal
premium they have paid. The no-claim scheme excludes the costs of care such as that provided by
general practitioners and the costs of midwives and maternity care.

Personal contributions
Insured persons may be required to pay part of the bill personally. This will apply if they took out an
in-kind policy but occasionally choose to exercise their legal right to obtain care from a care provider
not contracted by their care insurer. In some cases insured persons must pay a care-linked personal
contribution towards the costs of certain medicines and medical devices.

Personal excess
Insured persons aged 18 and older may elect to take insurance with a personal excess. The
permissible levels of the excess defined in the Health Insurance Act are €100, €200, €300, €400 and
€500. In return for the excess, a care insurer is required to give the insured person a discount on the
premium. This simplifies comparison of offered variants.

Personal contributions that an insured person must pay, as in the cases described above, are
disregarded when calculating the no-claim refunds and the person’s excess amount.

1.10 Risk equalisation

Care insurers run a financial risk when providing services covered by health insurance. The risks
relate to the actual services rendered and to the costs of the administrative side of the insurance.
Each year the Minister of Health, Welfare and Sport sets a separate contribution for each care
provider to defray the costs of the services they provide. Care insurers receive separate
compensation for the costs of providing insurance to persons younger than 18.

General
Under the Health Insurance Act, private insurers are responsible for running the health insurance
system, within basic parameters specified by the government. The parameters are that healthcare
should be accessible, affordable and of adequate quality. In a completely free health insurance
market, where clients have freedom of choice and there is sufficient transparency, various tools are
available to insurers to enable them to optimise their activities: risk selection, premium definition,
efficient procurement of care services and operational efficiency. One of the basic principles on which
such a market operates is that insurers can charge a client a premium that reflects the risks
associated with the client. This is known as the equivalence principle3.

Acceptance obligation
No differentiation of premiums
However, the Health Insurance Act does not create a completely free health insurance market; certain
parameters have been imposed to ensure general access to care. For example, care insurers are
legally bound to accept anyone who applies for cover and cannot charge different premiums to
different groups of clients. In effect, the law has suspended the equivalence principle. Without
additional mechanisms, an insurer with a relatively unhealthy client base would be at a disadvantage
compared with a rival with relatively healthy clients; the insurer with the less healthy clients would
have little choice but to increase premiums. Such a situation would be inconsistent with the principle
of a level playing field.
Care insurers have a legal obligation to accept any person who by law is required to have insurance,
and this obligation rules out the risk of direct risk selection. As all insured persons with the same
policy pay the same nominal premium, however, there could be an inducement to make an indirect
risk selection. If individual premiums cannot be adjusted in line with clients’ risk profiles, a health
insurer who takes on relatively high risk clients stands to lose out financially. Health insurers could be
tempted to seek to avoid less healthy clients, despite the acceptance obligation. A system of risk
equalisation mitigates the incentive to engage in this kind of indirect risk selection, which is
undesirable from the point of view of the accessibility of the system.

Risk equalisation
The equalisation contribution minimises the cost differences for insurers resulting from the health
profiles of insured persons. This contribution does not compensate for cost differences that ensue
from such matters as less efficient purchasing of care by care insurers, however. It will always be
necessary for a care insurer to endeavour to purchase good quality care at a reasonable price so as
to keep its health insurance premiums competitive.

Working of risk equalisation system

The working of the risk equalisation system and the way in which it encourages care insurers to
operate efficiently is based on a fairly simple principle. The care insurers will receive some of their
money for providing health insurance services from a fund established for that purpose. It is called
the Health Insurance Fund. The payments will be disbursed according to a general apportionment

3
The equivalence principle is that the size of the premium payable by an insured individual is related to the risk that the
individual wishes to cover.
key. The key will be predefined based on the characteristics of insured persons who form an indicator
of the likely costs of care. These correlations between the costs of care and the health profile of
insured persons have been statistically validated. The risk equalisation model contains parameters
that correct for health status differences related to age, gender and other objectively measurable
client health characteristics.

Objective criteria
It is necessary to define objective apportionment criteria in order to distribute money from the Health
Insurance Fund. The funding that care insurers will ultimately receive will depend solely on the health
risks of the people they insure. The purpose of the system of weightings for each apportionment
criterion is to predict the costs of each individual insured person as accurately as possible. This
concerns the costs resulting from the need for care to which the person is entitled under the Health
Insurance Act. Moreover, the only costs that are considered are the ones that are predictable. The
weightings are determined ex-ante (forward-looking determination).

Categories
The model used to equalise the risks needs to make a distinction between three categories of
services, i.e.:
• variable hospital nursing costs and specialist care costs;
• fixed costs of hospital care (i.e. the fixed costs of the stay in hospital);
• the costs of other services.

Ex-ante risk equalisation

Assessments of risks
Every care insurer that offers insurance in the Netherlands that satisfies the requirements of the
Health Insurance Act receives a standard amount each year. The amount reflects the health risks of
insured persons in its client base. This allowance is set at a level such that the sum of the allowance
and the realistic estimate of the insurer’s nominal premium income is equal to the forecast cost of the
care (“normative allowance”).

Ex-post aspects of risk equalisation

Retrospective correction for client numbers
The contributions received by care insurers must be corrected retrospectively for the differences
between estimated and actual numbers of insured persons. Health Insurance Fund disbursements
should be made in advance, in principle, based on forecast client numbers grouped according to
relevant characteristics of the clients. However, it is important to avoid a situation where a care
insurer who acquires a lot of additional clients in the course of a year – because the insurer quickly
gains a reputation of arranging care quickly and dealing with claims efficiently, for example – has to
wait until the following year to receive the state’s contribution towards the cost of providing care for
new clients. For that reason, the Health Insurance Act provides for the retrospective recalculation of
insurers’ allowances to reflect the actual numbers of clients and their characteristics.

Retrospective correction for cost parameter discrepancies

Disbursements made to care insurers are adjustable retroactively to their ultimate costs in the event
of extraordinary events – such as a nuclear explosion or natural disaster – that cannot be considered
part of a care insurer’s normal business risk.

Ex-post compensation
It will not be possible immediately after introduction of the Health Insurance Act to guarantee the
quality of the correlations of the costs and the characteristics of people formerly insured under the
private and public systems. Ex-post methods will be used to overcome this shortcoming of ex-ante
standardisation. The distribution of funds over the care insurers will be adjusted retroactively, based
on the costs they actually incur. The need for temporary ex-post compensation mechanisms is all the
greater because the introduction of the Health Insurance Act is linked to a wider programme of market
mechanisms being rolled out in the healthcare sector. As part of this shift, changes are occurring in
the allocation of the costs of providing healthcare provision. One such change is the introduction of
‘Diagnosis Treatment Combinations’, under which hospitals and medical specialists are paid for the
care they provide in a way that better reflects the underlying costs.

Compensation mechanisms
The ex-post compensation mechanisms are described below.
Compensation for high costs
High-cost compensation will help even out cost differences resulting from an unequal distribution of
extremely high claims of insured parties over care insurers. The complexity of the risk equalisation
system will increase if an attempt is made beforehand to identify individual bad risks and compensate
for them.
Generic equalisation
Generic equalisation is a way of correcting for possible shortcomings in the distributive working of the
model.
Retrospective calculation
Retrospective calculation is used to link the size of the financial risk to the scope that care insurers
have for influencing their costs.

The need for ex-post compensation mechanisms will decrease as better information becomes
available for adjusting ex-ante standardisation to the cost patterns of all insured persons for the new-
style funding of care services. The government intends to give priority to dismantling generic
equalisation.

Standard calculation premium

The equalisation allowances disbursed from the Health Insurance Fund will not be sufficient to cover
the cost of providing care to clients. Besides this contribution, care insurers will charge their insured
persons a nominal premium. The risk equalisation system ensures that everyone pays an identical
premium (‘calculation premium’). This premium represents the average amount a care insurer should
need to charge in order to meet all its clients’ claims. The object of risk equalisation is to compensate
for differences between care insurers in terms of the health risks of their client bases.

Costs of operating the system

Besides the costs of providing insured services, a care insurer incurs expenses for operating the
insurance system. The government does not in principle make corrections to reflect efficiency
differences with the aim of establishing an equal baseline position (efficiency can be influenced by
such measures as economies of scale or the outsourcing of administrative records and the
procurement of care). The operating expenses are disregarded in the risk equalisation system.
However, for insured persons below age 18, insurers have to bear not only the costs of care (for
which they receive an equalisation contribution), but also the operating expenses (for keeping records
and procuring care). A care insurer is unable to finance the operating expenses through a marl-up on
premiums for people younger than 18. To rectify this situation the care insurers receive a separate
nominal payment from the Health Insurance Fund.

1.11 Management and supervision

Tasks of the Health Care Insurance Board

The Health Care Insurance Board has been designated under the Health Insurance Act to oversee
the day-to-day running of the health insurance schemes. The board has tasks and powers to:
• supervise management of the package of cover by promoting unambiguous interpretation of
the insured cover and issuing guidelines to care providers. The board reports to the minister on
his request about proposed policy concerning the nature, content and scale of the package.
The board also alerts the minister on request and on its own initiative about factual
developments in the medical field that could necessitate altering the package;
• provide guidance to care providers, care insurers and members of the public about the nature,
content and extent of the package;
• promote harmonisation in the way the Health Insurance Act and Exceptional Medical Expenses
Act are implemented and in the execution of policy in other areas of public health and social
security;
• manage the Health Insurance Fund (the fund from which care insurers receive equalisation
disbursements) and the General Exceptional Medical Expenses Fund under the Exceptional
Medical Expenses Act;
• award grants and manage expenditure on subsidised care;
• perform tasks like acting as a collection and accounting office for financial settlement of
services rendered to insured persons in other countries, people living abroad with entitlement
 under treaties ratified by the Netherlands and foreign nationals in the Netherlands with treaty
rights;
• carry out the equalisation system;
• manage the tax that conscientious objectors pay in place of insurance contributions.

Regulation
The health insurance system is subject to regulation in a number of fields. The regulation extends to
the way care insurers act in financial markets, the way they carry out the provisions of the Health
Insurance Act, the way markets develop, the competition that exists among care insurers and care
providers and the regulation of the quality of care.

Dutch Central Bank

The insurers that render services under the Health Insurance Act are private companies. Therefore,
they are subject to the laws governing supervision of private insurers laid down in the Insurance
Supervision Act 1993. This supervision focuses on whether the insurer’s financial position is
sufficiently strong to cover its commitments and whether its business processes are organised in a
way that assures the company’s continuity so that it can continue meeting its commitments in the
future. The Dutch Central Bank, DNB, is the body that oversees compliance with these requirements.
An insurance company with its registered office in another EU member state is subject to the
supervision of the regulatory authority in its own country.

Financial Markets Authority

Private insurance companies are further subject to supervision to make sure they provide financial
services properly. This supervision extends to care insurers as well as insurance agents and other
distribution channels. The Financial Markets Authority, AFM, is the regulator charged with conducting
this supervision. AFM keeps a watch on compliance with the basic requirements that financial market
players must satisfy to be deemed a responsible distribution channel for financial products. Key
questions are whether the insurer informs its insured persons properly about their options and about
the premiums payable for the different insurance variants. The regulator also has the power to
monitor securities transactions with a view to assuring scrupulous investment of funds by
organisations like care insurers.

Supervisory Board for Health Care Insurance

The Minister of Health, Welfare and Sport is responsible for making sure that the Health Insurance
Act works properly. One of the ways in which he fulfils this responsibility is by sending the two houses
of parliament information about how the Act is protecting public interests. His accountability mainly
concerns compliance with the acceptance obligation, the prohibition of premium differentiation, the
obligation to provide care and the question of whether the insurance policy – the private law
agreement between care insurer and insured party – provides no more and no less insurance than
required by law. Other relevant accountability information includes a statement of the insured client
base in connection with equalisation arrangements and the question of whether the care insurer is
acting within the law with regard to collective contracts.

The choice for private insurance that assigns greater responsibilities to insurers who are allowed to
make a profit makes it inappropriate for the government to supervise the effectiveness of the way
health insurance is operated. Therefore, the main objective in overseeing lawful performance of the
new-style health insurance is for the government to ascertain whether the care insurer is fulfilling its
obligation to provided insured persons with the services to which they are entitled under the Health
Insurance Act. The regulator that exercises this supervision, the Supervisory Board for Health Care
Insurance, CTZ, has various duties and powers under which it:
• reports to the minister on whether the Health Insurance Act is being carried out in accordance
with the law;
• reports on the practicability, effectiveness and efficiency of proposed policy concerning
performance of its regulatory role;
• investigates care insurers at the request of the Health Care Insurance Board;
• has a possibility to impose rules for audits by care insurers and for the content and structure of
auditors’ reports.

Netherlands Care Authority

Removing barriers that impede market forces and “repairing” markets that do not yet satisfy market
forces criteria are important tasks and responsibilities for the government. The objective is to
strengthen the insured person’s position, remove market entry obstacles and create greater
transparency. The overarching goal is to promote transparency in the care market in a way that allows
members of the public to weigh up properly the choices they must make under the Health Insurance
Act. To ensure the system works properly it is imperative for insured persons to be able to “vote with
their feet”. With this in mind the government will create the new Netherlands Care Authority (NZa) to
bring about this situation. The task will be defined in the Healthcare Market Organisation Act (refer to
section 5.1). When the Act comes into force, the Supervisory Board for Health Care Insurance will be
absorbed into the Netherlands Care Authority and its rights and obligations will transfer to NZa.

Netherlands Competition Authority

The Competition Act regulates the general supervision of competition. Care insurers and care
providers are among those subject to the provisions of the Act. The Netherlands Competition
Authority (NMa) has been charged with making sure that care insurers comply with the Competition
Act.

Supervision of quality of care

The Health Care Inspectorate (IGZ) has been entrusted with overseeing the quality of public health
and the existence of regulations and their observance by care providers. The inspectorate monitors
the quality delivered by medical professionals as regards matters like competence to perform medical
procedures. It also keeps a watch on fulfilment of quality criteria for effectively and efficiently
delivering responsible care of a good standard that meets the patient’s needs.

1.12 Disputes

General
An insuring party (policyholder) or insured person who disagrees with a decision by a care insurer
concerning the provision of insured services has the right to require the care insurer to reconsider its
decision. If the care insurer fails to respond within a reasonable period of time, or fails to address or
address properly the objections that have been raised, the insured person may take the case to a
court of law with jurisdiction, or may place the dispute before an independent disputes arbitrator.
Besides a dispute about the way the law is being carried out, an insured person may have a
complaint about such matters as how the insurer treats him or about the resolution of a question
about which the insured person and insurer held different opinions. The procedures for disputes and
for complaints differ.

Civil courts
Health insurance is established under a private agreement, so in principle a dispute must be settled
under civil law. This principle is embedded in article 112, paragraph 1, of the Dutch Constitution,
which states that the judiciary must rule in disputes concerning civil and personal rights. This means
the sub-district courts or district courts and, on appeal, the court of justice. In the final instance an
appeal in cassation may be lodged with the Supreme Court.

Independent resolution of disputes

Proceedings before a court of law can take considerable time and can be expensive. Therefore, the
care insurer and the insuring party or insured person may jointly decide to refrain from approaching
the civil courts and instead place their dispute before an impartial third party. The Health Insurance
Act stipulates that a care insurer must make it possible for its policyholders and insured persons to
submit disputes about the performance of health insurance to an independent body.

Health Insurance Disputes Board

The health insurers have established a separate legal person for this purpose. It is called the Health
Insurance Disputes Board. This procedure for resolving disputes is subject to the Regulations of the
Health Insurance Disputes Board. The regulations require payment of a fee to avoid cases being
submitted to the board unnecessarily. The fee is refunded to the insured person or policyholder if its
case is upheld in full. The board’s judgment is a binding recommendation.

Advice from the Health Care Insurance Board

If a dispute concerns care or care-related services (like nursing, tending, stays in healthcare
institutions and transportation) or the charges payable for them, the board must obtain the advice of
the Health Care Insurance Board before ruling on the dispute.

Health Insurance Ombudsman

The Health Insurance Ombudsman hears any complaints about health insurance and deals with
complaints and disputes about supplementary insurances. The ombudsman was established in 1996
by Zorgverzekeraars Nederland, the association of care insurers in the Netherlands. The ombudsman
may also mediate in lodged disputes that arise when a care insurer takes a decision apparently
without due reconsideration.

The ombudsman mediates between an insured person and his/her care insurer or insurance agent in
the event of complaints about health insurance. The ombudsman endeavours to reconcile the parties
by convincing them of the reasonableness or unreasonableness of their respective positions. The
parties are treated as equals as a matter of principle.
2. Health Care Allowance Act

2.1 Background
Affordable health insurance
The Health Insurance Act establishes a single regime of premiums for all insured persons. Besides an
income-related contribution, which the Inland Revenue Service collects, insured persons owe their
care insurer a fixed premium called the nominal premium. The care insurer sets the size of the
nominal premium without reference to a person’s income. The government decided to introduce
health care allowances to avoid a situation where the level of premiums impeded access to care.

Health care allowance

Entitlement to the health care allowance depends on a person’s income. The allowance exists to help
a person pay the costs of the nominal premium. The health care allowance is not determined through
reference to the nominal premium a person actually pays, but by taking the average of premiums
offered by insurers under care policies. This approach was adopted to promote competition between
care insurers and to ensure that members of the public consider the size of the nominal premium
when choosing an insurer.

The Inland Revenue Service administers the Health Care Allowance Act. An application for the
allowance must be accompanied by an estimate of the income of the applicant and (if applicable)
his/her partner in the coming year. This estimate is used to pay out a monthly advance on the health
care allowance, starting in December prior to the year over which the allowance is due. Most people
will thus receive the allowance slightly earlier than the time they must start paying the nominal
premium to their care insurer. People may authorise the Inland Revenue Service to pay the health
care allowance directly to the care provider to allow immediate set-off against the nominal premium
they owe. Subsequently, the Inland Revenue Service determines the final amount of the health care
allowance – based on data like the person’s income tax returns – after which a settlement occurs if a
person has received too much or too little in the way of allowances.

People qualify for the health care allowance only if they have fulfilled their legal obligation to take out
health insurance. The right to a health care allowance is forfeited if a person’s partner has failed to
meet the insurance obligation.

Persons who live abroad and are subject to the obligation to take out insurance also qualify for the
health care allowance. The same applies to people who live abroad and are entitled to medical care
chargeable to Dutch insurance under international agreements rather than Dutch laws.

2.2 Purpose of the Act

The Health Care Allowance Act provides a contribution towards the costs of health insurance
premiums. It is intended for people for whom the premium would be disproportionately high in relation
to their income. Eligible people with rights under treaties also receive an allowance towards the
amounts they owe. The Health Care Allowance Act provides a right to financial assistance from the
state. The level depends on a person’s means. This makes the health care allowance an income-
related scheme subject to the General Income-linked Regulations Act. The definitions of terms used
in this Act, like partner and means testing, also apply under the Health Care Allowance Act.

2.3 Persons with legal entitlements

People covered by the Health Insurance Act
The Health Care Allowance Act applies to people who have fulfilled their legal obligation under the
Health Insurance Act to take out insurance (refer to section 1.3) and to people living outside the
Netherlands who have rights under treaties and have registered with the Health Care Insurance
Board. Everybody with health insurance is entitled to a health care allowance from the first day of the
calendar month after reaching age 18 if their premiums (or the payments owed by people with treaty
rights) are disproportionately high compared with their income. Children under 18 who live at home
have an independent right to a health care allowance.

2.4 Right to the health care allowance

Health care allowance
Norm for standard premium
A person with insurance under the Health Insurance Act qualifies for a health care allowance if the
normative costs determined for his/her health insurance agreement (called the “normative premium”
in the Health Care Allowance Act) are less than the estimated average premium costs (called the
“standard premium” in the Care Allowances Act). The health care allowance is equal to the difference
between the two types of costs. The Allowances department of the Inland Revenue Service checks
whether a person who applies for an allowance has actually taken out health insurance.

Percentage of the health care allowance

The normative costs of health insurance for an insured person with a partner have been set at 5% of
the threshold income defined in the Health Care Allowance Act plus 5% of the means-tested income
in excess of the threshold income. The normative costs of health insurance for an insured person
without a partner have been set at 3.5% of the threshold income plus 5% of the means-tested income
in excess of the threshold income. These percentages are adjustable by general administrative order.
The minister of Finance and the Minister of Social Affairs and Employment jointly determine these
percentages. A person with personal assets does not lose the right to the allowance.

Determination of entitlement to the allowance

The Allowances department of the Inland Revenue Service determines whether a person is entitled to
a health care allowance. It does this for each calendar month separately. Therefore, any change in a
person’s income immediately affects the size of the health care allowance. This makes it important for
people to inform the Inland Revenue Service immediately of any changes relevant to the allowance.
The advances on the allowance will be adjusted immediately. This system is designed to avoid
differences between the advanced and definitively determined allowances (refer to section 2.5).

Tax relief
Besides any entitlements to compensation for the costs of taking out health insurance, insured
persons have a right to tax relief under a scheme for exceptional expenses. Subject to the conditions
defined in fiscal legislation, people may claim tax relief on the costs they incur for health care
insurance. These costs include premiums actually paid insofar as they exceed the amount a person
receives in health care allowances. However, the fiscal regime is wider and embraces more care
costs than just the insurance premium. But by definition a person can claim only some of the costs
against tax. Tax relief is claimable under arrangements that exist for exceptional expenses if a person
entitled to tax relief has insufficient income to take advantage of the relief.

Health care allowances in an international context

Health care allowances for insured persons living abroad
The health care allowance is exportable under various treaties the Netherlands has signed. These are
the Council Regulation, the EEA agreement and the agreement between the European Community
and its member states on the one hand and the Swiss Confederation on the other on the free
movement of persons, plus various bilateral social security agreements the Netherlands has
concluded with other countries. Consequently, people who live abroad and are subject to Dutch law
may be eligible for a health care allowance on exactly the same conditions as if living in the
Netherlands.
Health care allowances for people with rights under treaties
Some other categories of people are entitled to medical care chargeable to Dutch insurance under
international agreements rather than Dutch laws. This right applies to family members of a person
who works in the Netherlands if they are residents of a “treaty country”. The right further extends to
people with a Dutch retirement pension or long-term social security benefits who would be insured
under the Health Insurance Act were they to reside in the Netherlands. The right also covers their
family members. These people qualify for the health care allowance on the same conditions as if
living in the Netherlands.

2.5 Implementation
Allowances department of the Inland Revenue Service.
Implementation of these arrangements has been entrusted to the Allowances department of the
Inland Revenue Service. Provided that a person applies on time, the department will pay out the
health care allowance in twelve monthly instalments. The first instalment is receivable in December
prior to the year for which the health care allowance has been calculated. Consequently, people
eligible for the allowance will receive it before the date they start paying their health insurance
premiums. An application for the allowance must be accompanied by an estimate of the income of the
applicant and (if applicable) his/her partner in the coming year. This estimate is used to pay out a
monthly advance on the health care allowance. The Allowances department of the Inland Revenue
Service subsequently refers to data like a person’s income tax returns to determine the definitive
amount of the health care allowance. If necessary a settlement occurs if a person has received too
much or too little in the way of allowances.

2.6 Funding
Means testing principle
Through the health care allowance, the government provides compensation for some of the premium
costs that people with a low income must pay for their health insurance. This approach is designed to
create a care system that evenly distributes the financial burden. Everybody makes a contribution
towards paying for the system according to the means testing principle. A person’s means determines
how much they receive in the form of allowances. Means testing includes the income of the applicant
and (if applicable) that of his/her partner.

Means testing
Under the General Income-Linked Regulations Act, a “reference income” is used to determine a
person’s means. The income of the applicant and (if applicable) the income his/her partner are
examined for this purpose.
Insured person (with a partner)
Only one-person or two-person households exist for the purposes of the health care allowance. This
is an important distinction when determining the level of financial compensation that will be provided.
The definition of a partner given in Section 3 of the General Income-Linked Regulations Act is applied
to determine whether a two-person household exists. An insured person and insured partner will
jointly have a single entitlement (right). So there will be one applicant for the health care allowance.
An insured person loses the right to a health care allowance if he/she has a partner who has failed to
meet the legal obligation to take out health insurance. A notional income is used to calculate the
health care allowance due to an insured person without personal income.

2.7 Reference income

A “reference income” is used to determine what means people have at their disposal for the purpose
of applying the provisions of the General Income-Linked Regulations Act. The point of departure is the
income of the applicant and (if applicable) the income of his/her partner. The reference income for
calculating the health care allowance is the joint income in the base year within the meaning of the
Income Tax Act 2001. The base year is the calendar year over which the health care allowance is
payable. The joint income will be printed on the tax assessment form received by insured persons
who must file income tax returns. In principle, the reference income is exactly the same as a person’s
taxable income. If a back-tax assessment is imposed (because of a higher joint income than declared)
subsequent to the tax assessment, it will automatically result in a higher reference income.

To ensure that the health care allowance reflects the applicant’s current income, the Inland Revenue
Service bases its calculations on a person’s income in the year in which the allowance will be
receivable.

Threshold income
A “threshold income” has been built into the health care allowance system to apply the principle that
everybody should personally pay some of the costs of care. The threshold income has been defined
in the Health Care Allowance Act. It is a mechanism for ensuring that nobody gets back all or nearly
all of the costs of their health insurance premiums. The level of the threshold income has been set at
a percentage of the statutory minimum wage for people aged 23. This amount is reduced by the
employee’s contributions under the Unemployment Benefits Act and Sickness Benefits Act and
increased by the allowance payable by an employer towards the income-related contributions owed
by an employee who is legally bound to take out health insurance.

2.8 Calculation of health care allowance

Amount of the allowance
An insured person qualifies for a health care allowance if his/her normative costs of health insurance
premiums (the normative premium) are less than the estimated average premium costs (standard
premium). The health care allowance is equal to the difference between the two types of costs.
Normative premium
The normative premium is the premium calculated for health insurance in the base year, based on the
threshold income and reference income of the insured person. The normative premium is a
percentage of the threshold income, plus a percentage of the reference income insofar as the
reference income exceeds the threshold income. The joint reference income is used for an insured
person with an insured partner.

Standard premium
A standard premium is the estimated average nominal premium for health insurance. This will be
reduced by the estimated average amount that an insured person gets back in the form of no-claim
refunds if he/she makes little if any use of care services. The standard premium used to calculate the
health care allowance is laid down by ministerial regulation. The size of the standard premium is the
average of the nominal premiums that insured persons are likely to pay for their health insurance in
any particular year. The point of departure is the average of the nominal premiums for the health
insurance estimated by the Netherlands Bureau for Economic Policy Analysis (CPB) in the year prior
to the base year. In April (of the base year) a calculation is made to determine whether the estimated
average of the nominal premiums in the preceding year differs from the actual average. If there is a
variance of €25 or more from the originally estimated premium costs, the standard premium for that
year that was used to determine the health care allowance will be adjusted immediately by ministerial
regulation. The Minister of Health, Welfare and Sport will inform the Allowances department of the
Inland Revenue Service of the new standard premium. If this situation arises, the decisions
concerning the awarding of health care allowances by the Inland Revenue Service will be amended
(as of 1st July) and the higher or lower health care allowance will be paid out in the same year.

2.9 Management and supervision

Checks by the Inland Revenue Service

The Allowances department of the Inland Revenue Service conducts checks that include whether a
person who wants a health care allowance has taken out health insurance or has registered with the
Health Care Insurance Board as a person with treaty entitlements. The purpose of the checks is to
make sure that persons who apply for health care allowances are entitled to them. The department
uses data that insurers and the Health Care Insurance Board are required to provide by law under the
Health Insurance Act.

After the base year, the Inland Revenue Service automatically checks the details of the applicant (and
if applicable those of the partner) using the available information and determines definitively the
allowance due. The details used for this purpose are income, household composition and the holding
of insurance or registration as a person with treaty entitlements.

2.10 Disputes (objections and appeals)

General Administrative Law Act

The Allowances department of the Inland Revenue Service implements the Health Care Allowance
Act. Implementation of the Act is governed by the rules of the General Income-Linked Regulations
Act. The latter Act regulates possibilities for objections and appeals against decisions on health care
allowances (i.e. the awarding and size of the allowance). Decisions concerning health care
allowances are taken in the form of an order issued by an administrative body. Therefore, the
decisions are subject to the rules embodied in the General Administrative Law Act. Different rules
have been framed for the periods allowed for lodging an objection or appeal. In principle, any person
who disagrees with a decision by the Allowances department of the Inland Revenue Service
concerning the awarding or size of a health care allowance has the right to file an objection with the
department. The department will rule on the objection. However, a person may subsequently lodge an
objection against this decision with a court of law that has jurisdiction to hear the dispute.
3. The Exceptional Medical Expenses Act

3.1 Background

In 1962, Health Minister Gerard Veldkamp put forward a plan for an insurance scheme to cover the
whole population against major medical risks. This scheme was intended to provide for the
considerable financial consequences of serious long-term sicknesses or disorders, in particular the
cost of caring for disabled people with severe congenital physical or mental disorders and psychiatric
patients requiring long-term nursing and care. The risk of incurring such costs is in fact not particularly
great, but virtually nobody that does incur them can bear such costs themselves. Hence the term
“exceptional medical expenses”.
The Exceptional Medical Expenses Act became law on 14 December 1967 (Bulletin of Acts, Orders
and Decrees 1967, 655) and came into effect in stages, starting on 1 January 1968.

3.2 Nature of the scheme

Insurance required by law

The Act makes insurance a legal requirement: everyone who meets the criteria spelled out in the
legislation is automatically insured and consequently obliged to pay the statutory contribution,
irrespective of whether the individual wants to make use of the benefits provided by the legislation.
People who object to insurance as a question of personal principle (‘conscientious objectors’) may
obtain exemption from the insurance obligations under the Act. Instead, they pay amounts under
income tax or payroll tax to replace the insurance premiums.

3.3 Insured persons

Persons insured under the Act

The Exceptional Medical Expenses Act is a national insurance scheme. Generally speaking this
means that the following persons are insured:
• residents of the Netherlands. Residents are people who live in the Netherlands. This primarily
means people who live on Dutch territory, but people living elsewhere can sometimes qualify as
residents of the Netherlands. In various cases, the courts have ruled that someone living beyond
the national borders can be considered to be a resident of the Netherlands in certain
circumstances. Generally speaking, a person’s place of residence depends on the community into
which he or she is integrated. So, for example, someone who can demonstrate that his or her
economic and social ties are primarily with the Netherlands may be considered resident in the
Netherlands.
• non-residents who are employed in and therefore liable for payroll tax in the Netherlands. This
category covers primarily cross-border commuters and expatriates.

Under these basic rules, it makes no difference whether a person is a Dutch national or not. However,
someone who is not a Dutch national must be legally resident in the Netherlands to qualify for cover
under the Act.

There are a number of exceptions to the basic rules set out above. On the one hand, some people
are covered even though they are residents of other countries. On the other, some people who are
residents of the Netherlands are not actually covered. These exceptions are explained in the 1999
Decree regulating Admission to the National Insurance Schemes. Among those who are insured are
Dutch civil servants and their family members who are stationed in foreign countries.

The insurance of children under the Act is not pegged to the insurance of the parents. A child’s place
of residence is determined by his or her own circumstances. The Act also differs from other social
insurance schemes in that there is no age limit on the insurance obligation.

Important considerations for application of the Exceptional Medical Expenses Act are the
arrangements that exist under the Council Regulation, the EEA agreement, the agreement between
the European Community and its member states on the one hand and the Swiss Confederation on the
other on the free movement of persons and bilateral social security agreements that the Netherlands
has concluded with other countries and include arrangements for the provision of medical care (refer
to chapter 4).
3.4 Management, administration and contracts between insurers and health care providers

Management and administration

The health insurers operate the Exceptional Medical Expenses Act scheme on their clients’ behalf.
The bodies that implement the provisions of the Act delegate various responsibilities – in particular
the contracting of health care providers, the collection of patient contributions and the organisation of
regional consultations – to regional health care offices. These offices receive a budget to pay for their
running costs. The Health Care Insurance Board sets the budget and it is subject to the approval of
the Minister of Health, Welfare and Sport.
Each health care office carries out tasks in a particular region for the implementing bodies. The health
care office, which receives its data from the implementing bodies, keeps records of the monthly
accounts and advance payments for each institution.
Where certain health care entitlements are concerned, it has been arranged that, as far as possible,
an institution only has to deal with one implementing body for both financial settlement and medical
supervision. To this end, the implementing bodies have handed responsibility for administration and
payments to a central administration office (“CAK-BZ”), which makes payments to the relevant
institutions.

Contracts between insurers and health care providers

Contracts
The bodies that implement the Exceptional Medical Expenses Act have a “duty of care” in that they
are required to ensure that their clients can obtain the health care to which they are entitled To this
end, the bodies or the health care offices they engage enter into contracts with health care providers
and institutions. These contacts regulate the volumes of health care services that will be provided, the
charges and other such matters.

3.5 Registration and validation of health care entitlements

Registration
Under the Exceptional Medical Expenses Act, a person must be registered with one of the
implementing bodies to be entitled to health care. A care insurer that has registered with the Health
Care Insurance Board to carry out the Act’s provisions represents its insured clients as an
implementing body under the Act. Consequently, people who are insured under the Act and have
taken out insurance with a care insurer are registered automatically for entitlements under the Act.
Persons insured under the Act who for any reason do not hold health insurance (like members of the
armed forces) are able to sign up with a care insurer for cover confined to the Act’s provisions. The
same applies to people covered by the Act who live outside the Netherlands.
Registration is for one calendar year at a time and is renewed at the end of each year unless the
individual concerned gives written notice in good time that he or she does not wish to renew. A health
insurance fund may require a period of notice of up to two months. Insured persons who end their
health insurance to take out cover with a different care insurer have their registrations for entitlements
under the Act transferred to their new insurer.

Validation of health care entitlements

Waiting times
Someone from abroad who settles in the Netherlands and thus comes within the scope of the
Exceptional Medical Expenses Act is not actually entitled to certain types of in-patient health care
covered by the scheme for a period of up to twelve months from the time that he or she takes up
residence. This rule applies if the care in question was already indicated when the person took up
residence in the Netherlands or if his/her medical condition at that time was such that it would have
been clear that the care would be needed within six months. The waiting period applies in relation to
expensive forms of care, such as nursing-home care. A person to whom this rule applies is not
necessarily unable to obtain care, but he or she cannot claim for the cost of such care through the
Act’s provisions.

CIZ indications
Before a person can qualify for care under the Exceptional Medical Expenses Act, it is necessary to
establish whether care is really required and, if so, what type of care and how much care is needed.
This ‘indication’ is issued by an organisation called CIZ. CIZ is an independent organisation
responsible for determining impartially, objectively and thoroughly what care is required. The client
then has the choice of receiving his/her entitlement as care in kind, or in the form of a personal care
budget; a combination of the two is also possible.

Care in kind
Care in kind is the provision of indicated care directly to the client by a health care provider (e.g. a
home care organisation) that is contracted to provide such care. The care provider arranges the
provision of care and its administration in consultation with the patient. A person who is entitled to
care does not have to obtain all his/her care from the same provider; he or she may receive some of
his/her care in kind from one provider and some (also in kind) from another provider.

Personal care budget

A person who is entitled to care under the Exceptional Medical Expenses Act can opt not to take care
in kind, but to receive a personal care budget. In principle, anyone who requires care under the Act for
more than three months can qualify for such a budget. The budget is a sum of money awarded to the
client to enable him/her to purchase care independently. However, the budgets are available only for
certain functional forms of care, such as nursing, general care and guidance; they are not available
for treatment or institutional accommodation (see below under entitlements). The latter forms of care
are always made available in kind.
Someone who has been awarded a budget is free to choose when and from whom they obtain care.
The budget provides freedom of choice alongside services a client prefers to receive in kind. Many
budget recipients like receiving assistance from a particular carer whom they choose themselves and
who does not change from day to day. In many cases the carer will be a personal acquaintance, such
as a neighbour or friend, but the client is also free to use the services of a health care organisation. In
other words, the budget gives clients considerable freedom of choice. Obligations are also attached to
the budget. Requirements include procurement of a responsible standard of care and the discharge of
regular financial accountability to the care office.

Care providers
Most care under the Exceptional Medical Expenses Act is provided by institutions. Before it is allowed
to provide care under the Act an institution must have received approval and concluded an agreement
with a body that implements the provisions of the Act.

3.6 Care under the Act in other countries

Under the Exceptional Medical Expenses Act, an insured person is generally required to use care
providers contracted by the body responsible for implementing the Act’s provisions. The implementing
body may contract care providers in the Netherlands or in other countries. This allows people to
receive care abroad insofar as it has been contracted by the implementing body. But the Exceptional
Medical Expenses Act also gives an insured person the freedom to approach and uncontracted care
provider in the Netherlands or another country. However, the prior consent of the implementing body
is sometimes required. People can additionally obtain care outside the Netherlands under
international social security agreements (also refer to chapter 4, “International aspects”).

3.7 Care entitlements under the Act

Entitlements
The Act and related legislation govern the entitlements to care that exist under the Exceptional
Medical Expenses Act. Procedural rules have been laid down under this legislation for such matters
as invoking certain rights to care or obtaining the implementing body’s prior permission. Assistance is
available only if the CIZ has decided that the insured person is in need of a particular type of care.
Personal contribution
For most types of care under the Act, clients above the age of eighteen are required to make personal
contributions towards the costs. The size of this contribution depends partly on the client’s taxable
income and domestic circumstances (whether he or she lives at home or in an institution). Other
relevant factors include whether the client is older than sixty-five and whether he or she is married or
cohabits. If the client is receiving a personal care budget, his/her personal contribution is deducted
directly from the budget. An insured person who pays a personal contribution towards in-kind care will
either receive a bill or the amount owed will be set off against state allowances like social assistance
benefits. The detailed rules are laid down in the Decree on Personal Contributions to the Cost of Care
and the associated Regulations on Personal Contributions to the Cost of Care.

Function-based entitlements
The entitlements that exist under the Exceptional Medical Expenses Act have been defined in terms
of functions. The focus is now on the needs of people entitled to care rather than on the available
supply of care. This change in emphasis is expected to pave the way for providing customised care.
The need to switch from a supply-side approach to a demand-side one came about as a result of a
changing society in which people increasingly voice their wishes and want to organise their lives in
the way they see fit. Another basic principle of the Exceptional Medical Expenses Act is that people
should continue to live at home for as long as possible. They can receive care either in the home or at
a healthcare institution.

Functions
Seven broadly-defined functions create considerable freedom for arranging indicated care in
consultation with a care provider. They are:
1. Domestic help: e.g. tidying up, cleaning, preparing meals.
2. Personal care: e.g. help with taking a shower, bed baths, dressing, shaving, skin care, going to
the toilet, eating and drinking.
3. Nursing: e.g. dressing wounds, administering medication, giving injections, advising on how to
cope with illness, showing clients how to self-inject.
4. Supportive guidance: helping the client organise his/her day and manage his/her life better, as
well as day-care or provision of daytime activities, or helping the client to look after his/her own
household.
5. Activating guidance: e.g. talking to the client to help him/her modify his/her behaviour or learn new
forms of behaviour in cases where behavioural or psychological problems exist.
6. Treatment: e.g. care in connection with an ailment, e.g. rehabilitation following a stroke.
7. Accommodation: some people are not capable of living independent lives, but require, for
example, sheltered housing or continuous supervision in connection with serious
absent-mindedness. In some cases, a client’s care requirements may be too great to address in a
home environment, making admission to an institution necessary.

Care is provided in the form of ‘products’. So, for example, home care, psychiatric care and admission
to a residential care home, nursing home or institution for people with physical or mental disabilities
are all Exceptional Medical Expenses Act products. A product consists of one or more functionally
defined forms of care. Illustration: Mr B has suffered a brain haemorrhage. He is convalescing and is
temporarily in need of nursing and general care. His indication therefore covers four functionally
defined forms of care: “general care”, “nursing”, “treatment” and “accommodation”. The combination
of these functions is delivered by admission to a nursing home.

Besides the care functions, people are entitled to such facilities as nursing articles, hospital care after
one year, rehabilitation (after one year), pre-natal care, examination of certain hereditary metabolic
diseases and vaccinations under the national vaccination programme.

3.8 Government grants

Subsidies
The basic provisions for awarding subsidies chargeable to the General Exceptional Medical Expenses
Fund have been embodied in the Exceptional Medical Expenses Act as a result of introduction of the
Health Insurance Act on 1st January 2006. As with the Health Insurance Act, the number of purposes
for which the government may provide subsidies is limited. In principle, a subsidy may be provided
only for care or other services that are likely to be brought into the package of insurable care. For that
reason, the government decided that the subsidy should be of a temporary nature.

In contrast with the Health Insurance Act, the Exceptional Medical Expenses Act defines two other
purposes for which subsidies may be given. They are a personalised healthcare budget and the
termination of pregnancies by abortion clinics. The principle remains that pregnancy terminations are
not financed through premium revenues but from tax revenues that the government allocates to the
Exceptional Medical Expenses Fund.
The Minister of Health, Welfare and Sport has the power to set a ceiling for each category of
subsidies. The Health Care Insurance Board may lay down supplementary rules. These include, for
example, an elaboration of the rules issued by ministerial decision if such is necessary to regulate the
practical side of awarding subsidies. These supplementary rules are subject to the minister’s
approval. Approval is not always possible on account of conflicts with written or unwritten law.
Similarly, the minister may occasionally withhold approval because the rules are counter to the
general interests of public health.

3.9 Funding

Covering of costs of care provided under the Exceptional Medical Expenses Act
The Exceptional Medical Expenses Act insurance scheme is funded by premiums paid by the people
whom the scheme covers, by the State Subsidy and by personal contributions from care recipients.
Contributions due under the Act are collected through the income and payroll tax systems, along with
the contributions for the other national insurance schemes. Every year the government sets the
contribution payable under the Act as a percentage of taxable income in the lowest two income tax
bands. The premium percentage in 2005 was 13.45%. People in paid employment have their
contributions deducted at source by their employers, who pay the money to the tax authorities. People
who are not in paid employment but are liable to pay income tax and social insurance contributions
receive tax assessments that include their contributions and thus pay their contributions straight to the
tax authorities. Insured persons below age 15 and those older than 15 without their own taxable
income do not owe any premiums.

An insured party pays the excess for using certain facilities like admission to a nursing home. The
excess amounts payable are usually linked to the level of a person’s income.

The Inland Revenue Service remits collected premiums to the Health Care Insurance Board that
deposits the money in the Exceptional Medical Expenses Fund. The board manages and administers
the fund. The implementing bodies that collect excess amounts from insured persons similarly remit
this money to the fund. Each year central government pays an amount into the Exceptional Medical
Expenses Fund to compensate for the financial effects caused by the modified levying system that
accompanied introduction of the Income Tax Act 2001. The government adjusts this payment from
year to year.

3.10 Management and supervision

Responsibilities of the Health Care Insurance Board
The tasks of the board under the Exceptional Medical Expenses Act are to:
• promote lawful and effective implementation of the Exceptional Medical Expenses Act by care
insurers and care facilitators and the possibility to set policy rules for implementing the Act’s
provisions;
• provide guidance to care providers, care insurers and members of the public about the nature,
content and extent of the insurance package;
• report to the minister on request about proposed policy for the nature, content and extent of
care entitlements;
• alert the minister on request and on its own initiative to factual developments that could
necessitate altering the package;
• award temporary subsidies;
• report to the minister on request and on its own initiative about the level of funds that need to
be available in the Exceptional Medical Expenses Fund and in the form of premiums for the
Exceptional Medical Expenses Act.

Responsibilities of the Health Care Insurance Board

The board is responsible for overseeing lawful and effective implementation of the Exceptional
Medical Expenses Act and the Health Insurance Act. More detailed information about the board’s
managerial and supervisory tasks in the coming years can be found in section 1.11, and in section 5.1
that deals with the Healthcare (Market Conditions) Act.

3.11 Disputes
Complaints
Clients with complaints about how they have been treated by an Exceptional Medical Expenses Act
implementing body must first lodge their complaint with the body in question. Under the General
Administrative Law Act, an Exceptional Medical Expenses Act implementing body has an obligation to
deal satisfactorily with such complaints. If the complainant is not satisfied with the response, he or she
can then submit a complaint to the National Ombudsman. The National Ombudsman assesses
complaints on the basis of accepted standards of conduct. The Ombudsman considers whether the
implementing body has acted in breach of the statutory code of conduct and whether its actions were
reasonable, equitable, justified and duly careful.
An aggrieved client also has the option of submitting a complaint about an implementing body to the
Health Care Insurance Board. The board can then take action if appropriate, for example by issuing
directives to implementing bodies. In the event of several complaints about the same subject, the
board may inform the Minister about the problems. This may in turn give grounds for policy changes
or amendments to legislation and regulation.

Objections and appeals

An insured person has the right to lodge an objection with the body that implements the Exceptional
Medical Expenses Act or with CIZ (an organisation that assesses and issues medical indications) in
response to a medical indication. The implementing body is legally bound to reconsider its decision
and to make known its findings on each lodged objection. If the objection relates to a decision
regarding entitlement to care under the Act or a related reimbursement, the implementing body is
obliged, if it does not entirely accept the objection, to ask the Health Care Insurance Board for its
advice before responding to the objection. This obligation does not apply to objections concerning
personal contributions, the size of which does not depend on medical factors. If the objector is
unhappy with the implementing body’s response to his/her objection, he or she may lodge an appeal
with an administrative court.
4. International aspects

4.1 Background

The social security systems of countries are usually confined to people who are resident or work in
the country concerned. This may result in some people being insured twice or not at all if they work in
one country and live in another. With a view to avoiding such situations that obstruct the free
movement of workers, the European Union established Council Regulation No. 1408/71 of 14th June
1971 on the application of social security schemes to employed persons, to self-employed persons
and to members of their families moving within the community (“Council Regulation”). Under this
regulation, people who are or were insured in one country retain their social security protection if they
move to a different EU member state to take up residence or employment. The Council Regulation
also allows people to obtain medical care when holidaying in another member state or if they go to
another member state with a view to obtaining medical care. A similar arrangement exists under the
European Economic Area (EEA) agreement between the EU member states and Liechtenstein,
Norway and Iceland. Another arrangement of this kind has been put in place under the agreement
between the European Community and its member states on the one hand and the Swiss
Confederation on the other concerning the free movement of persons. There are also less
comprehensive bilateral social security agreements between the Netherlands and other countries that
include arrangements for providing medical care.

4.2 Principles of international co-ordination

Basic principles
All international co-ordination agreements for social security laws are based on the principles
described below.

Equal treatment
Subjects of treaty states who visit other treaty states have the same social security rights and
obligations as subjects of the country they are visiting.

Applicable law
All international co-ordination agreements specify the law that applies to persons who live or travel
outside their own country. The objective is to avoid people being insured double (and thus having to
pay premiums twice) or, conversely, having no insurance at all (and thus paying no premiums). The
main rule is that employees and self-employed persons are subject to the law of the country where
they work. However, there are exceptions to this rule. The most important exceptions concern
persons on secondment in another country, persons employed in the international transport sector
and persons who work at diplomatic stations. Retired persons are generally subject only to the laws of
their country of residence.

Insured periods and waiting times

Entitlements to some social security services apply only after a person has been insured for a certain
period of time. To a limited extent this applies to entitlements under the Exceptional Medical
Expenses Act in the Netherlands. Waiting times are more common in other countries. People who
were insured in country A and take out insurance in country B begin a new insurance life, so to speak.
To avoid a situation where people lose the insurance time they accrued in country A, the time counts
in the calculation of waiting time in country B, insofar as necessary.

4.3 Obtaining care in other countries

Care while abroad

Four different situations with different administrative procedures may occur under the international
agreements that exist.
1. Obtaining care in other countries by insured persons residing in the Netherlands
Insured persons who require medical care while abroad are entitled to receive such care
according to the legal arrangements existing in the country concerned, even if the type of care
they require is not covered by their Dutch insurance. To invoke this entitlement they must show a
European health care insurance card or a treaty form. The costs of the care they receive will be
charged to the Dutch insurance. The insured person will be required to pay any excesses
 applicable under the laws of the country where the care is provided. The care insurer of the
insured party issues the EU health care insurance card and treaty forms. People who travel to
another country with a view to obtaining medical care in that country must ask their care insurer
to provide an EU or treaty form. A care insurer has a right to refuse to issue such a form in
certain cases if the required care is available in the Netherlands. Besides obtaining the care
under an international agreement, a person may also in this instance apply for care by seeking
recourse directly to his/her health insurance policy (also see section 1.6, Care outside the
Netherlands).
2. Dutch retirees and family members residing abroad and family members of people
working in the Netherlands
People who work abroad and draw a Dutch pension without receiving a pension in their country
of residence (and their family members) and family members residing abroad of people who work
in the Netherlands are not insured under the Exceptional Medical Expenses Act and are thus not
liable to payment of premiums under the Health Insurance Act. These people are referred to as
people with treaty rights. Under international agreements they are entitled in their country of
residence to medical care payable by the Dutch insurance system. The Netherlands pays a fixed
amount to the country of residence of people with treaty rights. This amount must be used to pay
for all the medical costs of the persons concerned. Against this right to medical care these
people are required to pay a contribution towards their entitlements under the treaty. They have a
right to receive the no-claim refund and, if applicable, an allowance under the Health Care
Allowance Act (refer to section 2.4). People with treaty rights are required to register with the
Health Care Insurance Board. The board issues a form they must use to register with the
insurance authority in their place of residence. This authority will provide them with an insurance
certificate usable to obtain medical care in their country of residence. The same authority issues
EU health care insurance cards and, if applicable, grants permission to obtain care outside the
person’s country of residence. People with treaty rights are entitled to care under the legal
system of their country of residence, even if the type of care they require is not covered by Dutch
insurance. Where applicable, insured persons will be required to pay any excesses due under
the laws of their country of residence. Many international agreements also allow these people to
obtain medical care in the Netherlands or in another country that is a signatory to the relevant
international agreement. They will usually need permission from the insurance authority of their
country of residence because the costs of the care will generally be charged to the insurance
system in that country.
3. Foreign insured persons temporarily in the Netherlands
Foreign insured persons temporarily in the Netherlands are entitled under the Dutch system to
medical care that becomes necessary during their stay in the Netherlands, even if they require a
type of care not covered by statutory entitlements under insurance in their own country. The
insured person will be required to pay any excesses that are due under Dutch laws. Foreigners
who require this kind of care must show an EU health care insurance card or treaty form issued
by an insurance authority in their own country. Foreign nationals who travel to the Netherlands
with the aim of obtaining care in this country may receive the care on presentation of a treaty
form. In effect, the form represents the permission of the foreign insurance authority to obtain a
medical care in the Netherlands.
4. Foreign retirees and family members residing in the Netherlands of persons working
abroad
People who reside in the Netherlands with a foreign pension without receiving a Dutch pension,
their family members and partners and children under 18 living in the Netherlands of people who
work abroad are entitled to care under statutory arrangements in the Netherlands, even if they
require a type of care not covered by entitlements in the country that pays their pension or the
country where they work. The costs of the rendered care will be payable by the insurance system
in the country concerned. The insured person will be required to pay any excesses that are due
under Dutch laws. These people must register with a care insurer designated by the Minister of
Health, Welfare and Sport and submit a form issued by the insurance authority of the country that
pays their pension or their country of employment. After registering with a Dutch care insurer,
they will receive a Dutch insurance certificate. Care is obtainable outside the Netherlands in the
same way as described above for the people in category 1. Most international agreements also
allow these people to obtain care in the country that pays their pension or their country of
employment, or in another country that is a signatory to the relevant international agreement.
They will generally need the permission of the insurance authority of their country of residence
 because the costs of the care will usually be payable by the insurance system of their country of
residence.

4.4 Procedures at the European Court of Justice

Proceedings before the court

Disputes about care provided in the European Union or the European Economic Area may be placed
before a national court of law with jurisdiction by persons who believe a breach has occurred of the
mandatory rules of the EC Treaty or regulations based on the treaty. If a dispute arises about the
interpretation of European legislation, a national court has the power, and in the final instance the
obligation, to ask the European Court of Justice for a preliminary ruling. The court gives preliminary
rulings in response to requests for guidance on the interpretation of provisions embodied in the EU
treaty. The preliminary ruling is binding on national legal systems.

The European Court of Justice is also hears “infraction cases” that the European Commission may
institute if it believes member states are not applying European legislation correctly. The procedure
begins with a formal request to a member state to comply voluntarily with the treaty requirements or
the regulation concerned. If the member state refuses to discontinue the breach, the Commission will
formulate a recommendation, stating its standpoint, and will invite the member state to take measures
– which may be specified in detail – to rectify non-compliance within a period of time specified by the
Commission. If the member state fails to act on the recommendation within the allotted time, the
Commission has the right to file an appeal with the European Court of Justice.

4.5 Treaty countries

Treaty countries
Insured persons and people with treaty rights are entitled to medical care in the following countries in
accordance with the international co-ordination agreement applicable in the country concerned:

• The European Union member states: Austria, Belgium, Cyprus, Czech Republic, Denmark,
Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania,
Luxembourg, Malta, Netherlands, Poland, Portugal, Slovenia, Slovakia, Spain, United Kingdom
and Sweden;
• The European Economic Area member states: Iceland, Liechtenstein and Norway;
• Australia (only during temporary visits), Turkey, Morocco, Tunisia, Cape Verde, Croatia and
Switzerland.
• The old social security treaty between the Netherlands and Yugoslavia still applies in
Macedonia, Serbia and Montenegro (Federal Republic of Yugoslavia) and Bosnia-Herzegovina
pending its replacement by treaty agreements between these states and the Netherlands. The
treaty negotiations with Macedonia and the Federal Republic of Yugoslavia had been
completed and the procedure has been initiated for introducing the treaties. Negotiations with
Bosnia Herzegovina were still in progress mid-2005.
5. Related legislation

5.1 Health Care (Market Conditions) Act

The Health Care (Market Conditions) Act regulates the establishment of the Netherlands Care
Authority (‘NZa’). The Act defines the tasks, powers and instruments of the authority and its
relationships with the Minister of Health, Welfare and Sport and with other regulators and supervisory
bodies.4

Organisation of Netherlands Care Authority

The Netherlands Care Authority is an independent administrative body with legal personality. It is
funded from the budget of the Ministry of Health, Welfare and Sport. The authority’s board consists of
not more than three members. Stakeholder organisations have no special legal position in the
preparation of the authority’s decisions. The personnel are employed by the authority and have the
same conditions of employment as all other civil servants. The National Health Tariffs Authority and
the Supervisory Board for Care Insurance will be absorbed into the Netherlands Care Authority.

Tasks of the Netherlands Care Authority

The Netherlands Care Authority exists to:
• regulate the markets for providing, insuring and procuring care. This task extends to making
and monitoring markets as well as regulating them. The authority regulates tariffs and services.
It also promotes the transparency of markets and the availability of information about choices
available to consumers;
• oversee lawful implementation by care insurers of the provisions of the Health Insurance Act,
including the care and acceptance obligations and the prohibition of premium differentiations;
• oversee lawful and effective performance of the provisions of the Exceptional Medical
Expenses Act by care insurers, care offices and the central office that administers the
Exceptional Medical Expenses Act.

Principal new powers of the authority

The most important new power held by the Netherlands Care Authority is to impose specific
obligations on parties with significant market power. It has been given the power to do this in order to
cultivate the care procurement market in fields where free pricing exists. The authority further has
powers to lay down general rules for care providers and care insurers to increase the transparency of
the market for consumers. The authority will also be given the power to publish transparency
information if care providers and care insurers fail to do so.

Relationship between the Minister of Health, Welfare and Sport and the Netherlands Care
Authority
The Minister of Health, Welfare and Sport sets the main policies and takes political decisions on
healthcare. The Netherlands Care Authority implements and enforces the law. Among other things the
minister designates parts of the market where tariffs are freely negotiable. The authority then imposes
obligations, if necessary, on a party that possesses significant market power. The minister also
determines such matters as the form of price regulation in distinct parts of the market where he
considers such regulation necessary. The authority works out the details and carries out the policy.

The minister appoints the board of the Netherlands Care Authority, approves its financial estimates,
work programme, financial statements and rules of its board and assigns its budget. The minister has
power to issue orders to the authority about the way it works and how it carries out its tasks. This
power extends to the content of policy rules and general regulations. The minister may recommend to
the Crown that it annuls board decisions of a general nature. He may also intervene if the authority
neglects its duties.

Relationships between the Netherlands Care Authority and other regulators

The Netherlands Care Authority has a duty to exchange information with other regulators like the
Netherlands Competition Authority, Dutch Central Bank, Financial Markets Authority and Health Care
Inspectorate for the purpose of harmonising and performing their tasks. These parties conclude co-

4
Parliament had not finished debating the Social Support Act at the time this brochure was published. The intention is for this
Act to come into effect at the same time as the Health Insurance Act and the Care Allowances Act on 1st January 2006.
operation protocols with each other. The Netherlands Competition Authority watches over compliance
with competition laws, the Dutch Central Bank (DNB) oversees the business economics of care
insurers to make sure they are financially solid and the Financial Markets Authority monitors their
financial practices insofar as unrelated to specific healthcare matters. The Health Care Inspectorate is
charged with supervising the quality of care.

Tasks/powers of the Netherlands Care Authority

The Netherlands Care Authority’s tasks and powers for overseeing compliance with the Health
Insurance Act and Exceptional Medical Expenses Act have been laid down in the Health Care (Market
Conditions) Act. Tariffs in the healthcare sector are determined by the authority unless they have
been excluded from regulation (as in the case of free market or exempted tariffs).
Another task of the authority is to make and maintain markets in the healthcare field. The authority
has also been entrusted with promoting the transparency of markets for the benefit of consumers. A
desk will be established at the authority to enable people to report facts and circumstances that may
constitute breaches of the Health Care (Market Conditions) Act. Anybody may contact the desk about
bills rendered by care providers that are not in keeping with the tariffs set by the Netherlands Care
Authority (“care fraud”).

5.2 Social Support Act

Background
The Social Support Act5 is one of the government’s answers to issues that will confront society in the
coming years because of demographic, socio-cultural and socio-economic developments. Issues that
must be addressed include an ageing population, cultural integration, individualisation and the
declining number of working people compared with the number of people requiring full or partial
support, like children, people with limitations, the disabled, psychiatric patients and the elderly. These
are matters that call for a new balance of responsibilities between public and government and also
between the authorities and citizens. The nation’s social capital must be protected, retained and if
possible reinforced. At the same time, the outlined developments cannot be allowed to impose an
unacceptable and unaffordable burden on services rendered under the Exceptional Medical Expenses
Act.

The government’s view is that the Netherlands needs a strong social structure in which self-
organisation, social commitment and personal responsibility are important factors play in the
existence of professional arrangements for care, culture and welfare. The government is convinced
that by providing good primary facilities and preventive support it will be far easier to fulfil the wish of
the participation in mainstream society by all members of the public, young and old, with and without
limitations. Moreover, it will be possible to provide professional support far more systematically way
where such an approach is required. A collective insurance system like the Exceptional Medical
Expenses Act will remain available to people with a severe and prolonged need for care. Far more
than is presently the case, a cohesive local policy will need to be pursued on social support, housing,
welfare and adjacent fields. Within a direction-setting legal framework, municipalities will be given the
scope and take responsibility for conducting policy. They will be urged to achieve results for which
they will be accountable to the public at large and especially to people in need of care. This approach
necessitates greatly strengthening a municipality’s position for the provision of social support. Efforts
in this direction started with the introduction of the Welfare Act 1994. Introduction of the Services for
the Disabled Act significantly increased the responsibilities that municipalities have for ensuring the
participation of the elderly and disabled in mainstream society. The Social Support Act goes a step
further along this path. What is more, the Act makes it possible to frame integral policy by bundling
and reinforcing existing regulations to serve the local population. The government sees the present
bill as the first step towards bundling regulations and powers for local governments.

Nature of the Act

The government’s intention in its bill for the Social Support Act is to encourage people with the ability
to do so to find their own solutions – more than is currently the case – to problems that arise in their
social setting. That is why the government has raised for discussion matters that over the years have
become taken for granted in the care sector and is calling on people to make greater use of their own
resources. The government is convinced that municipalities are excellently placed to provide a
5
Parliament had not finished debating the Social Support Act at the time this brochure was published. The intention is for this
Act to come into effect on 1st January 2006.
cohesive system of support for people insufficiently able in certain situations to find solutions on their
own or together with others. This concerns such matters as housekeeping support, offering social
support, adapting the home and arranging wheelchairs and mobility scooters.

The Social Support Act can establish an unbroken chain of support and enlarge bespoke services.
The Act also creates a possibility for municipalities to be more service-minded and to reach the
people less able to speak up for themselves. The present system, especially the Exceptional Medical
Expenses Act, provides no footings for such an approach, because it leans far more towards people
who are able to indicate the care they need. The bill provides a stronger basis for the involvement of
and accountability to members of the public and local players (horizontal accountability).

The Social Support Act is a new law that will absorb and bundle the following existing laws (or parts
thereof):
• Services for the Disabled Act;
• Social Welfare Act 1994;
• domestic help provided under the Exceptional Medical Expenses Act;
• some grants schemes under the Exceptional Medical Expenses Act (like support provided to
the elderly, infirm and others requiring assistance by family/friends outside the professional
setting) and services in sheltered accommodation.

People legally entitled to facilities

Municipal authorities are responsible for offering facilities that allow people to participate in
mainstream society and to help each other. Unless otherwise stipulated, foreign nationals in the
Netherlands without valid residency papers are excluded from services offered under the Social
Support Act.
The bill makes municipalities responsible for deciding whether somebody entitled to an individual
service will have a choice of receiving the service in kind, getting a financial allowance or obtaining a
personalised healthcare budget. A municipality may decide that a person aged 18 or older must pay a
personal contribution. A financial allowance may further be made dependent partly on the income of
the person who is entitled to services.

Implementation of the Act

The purpose of the Social Support Act is to allow everybody to take part in society. The Act assigns
responsibility for this participation to the public, companies and community organisations. They are
the ones that must take initiatives that ensure that nobody faces unnecessary obstacles in everyday
life. Local communities should take steps to get everyone to participate. The municipality can provide
support if a helping hand is required to achieve this situation. More than central or provincial
government, a municipality can mobilise members of the public and organise support close to
members of its population. The municipality is able to offer bespoke services at the heart of the
community.
Municipalities have a duty to offer services that allow people to participate in society and help each
other. They can embed service offerings at a single point of contact that citizens can approach to
obtain information and advice and to apply for services.

Range of services
The Act overarches the social support field and is designed to address the nine subjects listed below:
• promote social cohesion and quality of life in villages, districts and neighbourhoods;
• provide preventive support for young people with behavioural problems and for people with
parenting problems;
• provide information, advice and support for clients;
• support informal care providers (family, friends, etc.) and voluntary workers;
• promote participation in mainstream society and the independent functioning of people with a
limitation or chronic psychological problem and people with a psychosocial problem;
• provide facilities for people with limitations or chronic psychological problems and for people
with psychosocial problems to allow them to continue functioning independently or join
mainstream society;
• offer care hostels and shelters for women;
• promote public mental health care (excluding psychosocial help in the event of disasters);
• promote policy on addiction.
The Social Support Act also assigns a task to provincial governments, namely:
• facilitation of support services, i.e. by undertaking activities that underpin the preparation and
rendering of support and that pave the way for implementation of a municipality’s social support
policy.

The government wants municipalities to involve their citizens and client organisations in plans for this
Act. At least once every four years a municipality will be required to draw up a plan that shows how
social support is organised.

Funding
The Social Support Act enlarges the present range of tasks that municipalities perform. The
municipalities will be able to absorb the costs through extra money that central government will pay
into the Municipalities Fund out of the budget. The amount will be in keeping with the increased tasks.
The government has opted for funding through the Municipalities Fund in order to maximise the
freedom that municipalities have to set their own policies and to minimise their implementing
expenses.

Management and supervision

Accountability for policy and implementation of the Social Support Act must take place primarily at
municipal level. Therefore, municipalities will be accountable principally to their citizens. Apart from
the obligation to provide care, central government will not impose any restrictions that limit the
freedom of a municipality to set its own policy.

Disputes
People will have the right under the general Administrative Law Act to lodge objections and appeals
against decisions by the municipality.
List of abbreviations

More information about international aspects of the Health Insurance Act and the Exceptional Medical
expenses Act can be found in a separate brochure published by the ministry entitled
Uw ziektekostenverzekering als u in het buitenland woont (Your health care insurance if you live
outside the Netherlands). The brochure can be downloaded from the ministry’s website at
www.minvws.nl by entering the keywords: brochures, ‘international situations’ brochure.
Acts of Parliament

General Administrative Law Act (Algemene wet bestuursrecht) (Netherlands Bulletin of Acts, Orders
and Decrees 1992, 315), as most recently amended by an Act of 3rd February 2005 (Netherlands
Bulletin of Acts, Orders and Decrees 2005, 71)

Exceptional Medical Expenses Act (Algemene Wet Bijzondere Ziektekosten) (Netherlands Bulletin of
Acts, Orders and Decrees 1992, 392), as most recently amended by an Act of 9th December 2004
(Netherlands Bulletin of Acts, Orders and Decrees 2005, 27)6

General Income-Linked Regulations Act (Algemene wet inkomensafhankelijke regelingen), Act of

23rd June 2005 (Netherlands Bulletin of Acts, Orders and Decrees 2005, 344)

Constitution (Grondwet) (Netherlands Bulletin of Acts, Orders and Decrees 1815, 45), as most
recently amended by an Act of 20th January 2005 (Netherlands Bulletin of Acts, Orders and
Decrees 2005, 52)

Competition Act (Mededingingswet) (Netherlands Bulletin of Acts, Orders and Decrees 1997, 242), as
most recently amended by an Act of 30th June 2004 (Netherlands Bulletin of Acts, Orders and
Decrees 2004, 345)

Council Regulation (EEC) No. 1408/71 of 14th June 1971 on the application of social security
schemes to employed persons, to self-employed persons and to members of their families moving
within the Community (OJ No. L 149 of 5.7.1971)

Social Welfare Act (Welzijnswet) (Netherlands Bulletin of Acts, Orders and Decrees 1994, 447), as
most recently amended by an Act of 9th July 2004 (Netherlands Bulletin of Acts, Orders and
Decrees 445, 2004)

Unemployment Insurance Act (Werkloosheidswet) (Netherlands Bulletin of Acts, Orders and Decrees
1986, 566), as most recently amended by an Act of 28th April 2005 (Netherlands Bulletin of Acts,
Orders and Decrees 2005, 274)

Financial Services Act (Wet financiële dienstverlening), Act of 12th May 2005 (Netherlands Bulletin of
Acts, Orders and Decrees 2005, 339)

Income Tax Act 2001 (Wet inkomstenbelasting 2001) (Netherlands Bulletin of Acts, Orders and
Decrees 2000, 215), as most recently amended by an Act of 28th April 2005 (Netherlands Bulletin of
Acts, Orders and Decrees 2005, 227)

Act Governing Joint Funding of Elderly Health Insurance Fund Patients (Wet medefinanciering
oververtegenwoordiging oudere ziekenfondsverzekerden) (Netherlands Bulletin of Acts, Orders and
Decrees 1986, 117), as most recently amended by an Act of 30th January 2002 (Netherlands Bulletin
of Acts, Orders and Decrees 2002, 82)

Medical Insurance (Access) Act (Wet op de toegang tot ziektekostenverzekeringen) 1998

(Netherlands Bulletin of Acts, Orders and Decrees 1998, 438), as most recently amended by an Act of
2nd December 2004 (Netherlands Bulletin of Acts, Orders and Decrees 2004, 712)

Individual Health Care Professions Act (Wet op de beroepen in de individuele gezondheidszorg)

(Netherlands Bulletin of Acts, Orders and Decrees 1993, 655), as most recently amended by an Act of
2nd December 2004 (Netherlands Bulletin of Acts, Orders and Decrees 2004, 712)

Health Care Allowance Act (Wet op de zorgtoeslag), Act of 16th June 2005 (Netherlands Bulletin of
Acts, Orders and Decrees 2005, 369)6

6
The Exceptional Medical Expenses Act, Care Allowances Act , Health Insurance Act and Health Care Charges Act are subject
to substantial amendment if parliament passes the bill tabled for the Introduction and Modernisation (Health Insurance Act) Act
(Parliamentary Papers 2004/05, 30 124 A) and it becomes law.
Services for the Disabled Act (Wet voorzieningen gehandicapten) (Netherlands Bulletin of Acts,
Orders and Decrees 545, 1993), as most recently amended by an Act of 27th September 2001
(Netherlands Bulletin of Acts, Orders and Decrees 2001, 481)

Health Care Charges Act (Wet tarieven gezondheidszorg) (Netherlands Bulletin of Acts, Orders and
Decrees 1980, 646), as most recently amended by an Act of 9th December 2004 (Netherlands Bulletin
of Acts, Orders and Decrees 2005, 24 and 27)6

Insurance Supervision Act 1993 (Wet toezicht verzekeringsbedrijf 1993) (Netherlands Bulletin of Acts,
Orders and Decrees 1994, 252), as most recently amended by an Act of 3rd February 2005
(Netherlands Bulletin of Acts, Orders and Decrees 2005, 71)

Social Health Insurance Act (Ziekenfondswet) (Netherlands Bulletin of Acts, Orders and Decrees
1992, 391), as most recently amended by an Act of 23rd December 2004 (Netherlands Bulletin of
Acts, Orders and Decrees 2004, 725)

Sickness Benefits Act (Ziektewet) (Netherlands Bulletin of Acts, Orders and Decrees 1913, 204), as
most recently amended by an Act of 23rd December 2004 (Netherlands Bulletin of Acts, Orders and
Decrees 2004, 717, 720 and 731)

Health Insurance Act (Zorgverzekeringswet), Act of 16th June 2005 (Netherlands Bulletin of Acts,
Orders and Decrees 2005, 358)6

Bills

Social Support Act (Wet maatschappelijke ondersteuning) (Parliamentary papers II 2004/05, 30 131)

Health Care (Market Conditions) Act (Wet marktordening gezondheidszorg) (Parliamentary papers II
2004/05, 30 186)
Published by: The Ministry of Health, Welfare and Sport
Ministry of Health, Welfare and Sport receives numerous requests for information from
the Netherlands and other countries about the
Address for visitors: system of health care insurance that exists in the
Parnassusplein 5 Netherlands.
2511 VX The Hague This brochure provides the required information
The Netherlands and is intended mainly for readers with some
prior knowledge of health care insurance.
Correspondence address: Subjects the brochure covers include the Health
PO box 20350 Insurance Act, Health Care Allowance Act and
2500 EJ The Hague Exceptional Medical Expenses Act. The brochure
The Netherlands further contains information about international
Telephone +31-(0)70-340 79 11 aspects of health care insurance schemes.
Telefax +31-(0)70-340 78 34

Internet:
www.minvws.nl

September 2005