An empirical examination of risk equalisation in a regulated community rated health insurance market

Despite universal access entitlements to the public healthcare system in Ireland, over half the population is covered by voluntary private health insurance. The market operates on the basis of community rating, open enrolment and lifetime cover. A set of minimum benefits also exists, and two risk equalisation schemes have been put in place but neither was implemented. These schemes have proved highly controversial. To date, the debate has primarily consisted of qualitative arguments. This study adds a quantitative element by analysing a number of pertinent issues. A model of a community rated insurance market is developed, which shows that community rating can only be maintained in a competitive market if all insurers in the market have the same risk profile as the market overall. This has relevance to the Irish market in the aftermath of a Supreme Court decision to set aside risk equalisation. Two reasons why insurers’ risk profiles might differ are adverse selection and risk selection. Evidence is found of the existence of both forms of selection in the Irish market. A move from single rate community rating to lifetime community rating in Australia had significant consequences for take-up rates and the age profile of the insured population. A similar move has been proposed in Ireland. It is found that, although this might improve the stability of community rating in the short term, it would not negate the need for risk equalisation. If community rating were to collapse then risk rating might result. A comparison of the Irish, Australian and UK health insurance markets suggests that community rating encourages higher take-up among older consumers than risk rating. Analysis of Irish hospital discharge figures suggests that this yields significant savings for the Irish public healthcare system. This thesis has implications for government policy towards private health insurance in Ireland.

Home: the foundations of belonging

To be at home means to be embedded in a dense pattern of relationships to people and place which gives rise to an inherently meaningful experience of the world. This order is neither abstract nor imposed from without, but crystallises from the shared experience of people inhabiting a concrete location. Home involves the localisation of meaning in a concrete setting and in the activities of everyday life, and this embodies an ongoing process of ‘cosmicisation’ which is vital for both social life and individual well-being. Home is not a fixed structure, static and frozen, which shuts out the external world; it is a dynamic centre which draws in experience and gives it meaning. It is a constellation of significance rather than a singular and unitary essence. It is produced by localising processes, which work to concentrate and stabilise value around a secure centre. The elaboration of seven interlinked localising processes forms the core of the thesis: The cultivation of place The accumulation of collective memory The crystallisation of life-ways and their evolution into tradition The generation of mutuality of being through sharing in fundamental biological processes which generate and preserve life Social circles of gift exchange and recognition which reinforce this mutuality of being The elaboration of symbolic boundaries The counterparts of localising processes are globalising ones. These involve the dismantling of the taken-for-granted relationships of everyday life and their reconstitution within spatially extended networks, governed by rationalised institutions, within separate spheres of economic production, commercial transactions, political administration and cultural exchange. The global market, the public arena, technological development and the bureaucratic state are all solvents of localised associations, which result in the dissipation and relativisation of value. However globalising processes never entirely displace localising ones. Even today, localising processes shape those areas of our lives which anchor our identities and provide a sense of meaning: the everyday interactions of home, family, community and intimate circles of friendship.