**5.2 Complementary health insurance and inequities**

CHI is purchased by more than 95% of the population liable for co-insurance, which means 73% of the population. The premiums are flat-based and regressive and cover copayments in the range between 10% and 90% of the price of the services. Due to flat-based premiums, CHI has always been criticized from the equity viewpoint. In time, many adjustments have been made to the flat-based premium, such as coverage

#### *Complementary Health Insurance in Slovenia DOI: http://dx.doi.org/10.5772/intechopen.105150*

of costs of copayments for the socially vulnerable, who cannot afford to purchase CHI. Copayments are also covered for war veterans and prisoners. As the copayments are covered at the point of the service, the inequities caused by flat-based premiums are largely tackled, except for around 5% of the population right above the income limit, which would enable them to receive social benefits. For these citizens, the insurance is out of reach and might face higher unmet needs.

Since 2006, the share of CHI in total household consumption levelled around 2.9%. In 2012, the regressive nature of CHI premiums was importantly limited, when automatic coverage of CHI claims for all socially vulnerable populations from the central budget was introduced (**Figure 4**).

Due to the widely defined basic benefits package, covered by two financial sources, the demand for additional services, that are not included in the basic benefit package, is very low. The out-of-pocket payments are, consequently, the lowest in the European region and amounted to 12% according to the last available data from 2018.

## **5.3 Complementary health insurance and risk selection**

In Slovenia, a system of risk equalisation and the creation of an efficient model for the long-term sustainability of the health care financing system was prepared by the MoH and included in the law in 2005 [7, 12, 17]. Risk equalisation or compensation schemes are necessary to support community-rated health insurance and were created for the market CHI. Basically, health insurers receive credits or subsidies from a national fund or authority to compensate for the additional costs of insuring older and less healthy members. The Health Care and Health Insurance Act in Article 23 regulates the basket of health benefits for a compulsorily insured person [7], albeit very substantial, from 100% to 10% of the value of the healthcare service for most adult insured persons; payment of the difference or balance up to 100% of the value of the healthcare service is the responsibility of the insured person who received the healthcare service (also depending on the type of treatment or activity) [17]. To prevent 'cream-skimming', companies have been obliged to participate in risk

**Figure 4.**

*CHI expenditure as share of total household consumption, according to income quintiles, 2008–2018. Source: Zver et al. [16].*

equalisation to compensate for differences in health care costs between insurance companies [7, 12].

Quite restrictive legislation [7] stipulates that insurers are obliged to cover the costs of all publicly financed health services. Children are exempt from the copayments and therefore do not need CHI. CHI appears to be compulsory for adults, as they must pay penalties if they do not take out CHI once they become liable for the copayments. For each full year (12 months) that they do not have CHI, the penalty is 3% of the premium. The maximum penalty is 80% of the premium [17, 18]. The uniform flat premium for all CHI-insured persons established by the Health Care and Health Insurance Act [7] is independent of gender, age, or health status. However, equality is guaranteed between the different providers of CHI and between the insured person and the insurance conditions of CHI regarding the duration and termination of CHI contracts (**Table 2**) [12].

The monthly basic insurance premium for the three companies in the Slovenian market of CHI shows a sustained upward trend over the period 2006–2019, despite a slight price decrease from 2013 to 2014 (**Figure 5**). Between 2006 and 2013, the premium increased by €93 per insurance policy [12, 20]. Apparently, Generali and Triglav zdravje are slightly higher than Vzajemna, which could be a form of risk selection [19, 20].

The experience with risk equalisation shows that all three companies make regular payments to CHI, as would be appropriate given their risk profiles. However, these payments are quite small, amounting to only €12 M in 2014. This corresponds to about 3% of the total premium income [19, 20].

The simplest risk adjustment factors used to balance premium risk are based on age and gender. They are easy to collect and monitor, but they are a poor measure of expected health care costs [21]. Improving the risk equalisation formula should be a focus of government action to ensure that the market CHI functions efficiently [20].
