At the interface of public and private health, there are multiple interactions that affect the well-being of citizens. Among the most controversial is the question of what regulatory and fiscal treatment should be given to voluntary private health insurance (not to be confused with the substitute, that of MUFACE officials, who have access at zero cost and which will be analyzed soon). We are talking about an insurance that the citizen, or the company on behalf of the worker, pays without losing public assistance, in which he maintains the right as a taxpaying citizen. Like private pensions, we put the case, to complete the public ones, mandatory for contributors.
The debate resides on whether this form of voluntary insurance has to be subsidized fiscally, under the assumption that it relieves pressure on the public system, and whether premiums have to be regulated to appease the selection of risks in some cases.
On these questions we generally find conflicting positions for which it is difficult to find sufficiently balanced arguments. Some advocate that, indeed, voluntary insurance does replace the use of the public system; it decongests public assistance in some things and, thus, alleviates the access of those who do not want or cannot subscribe those policies.
Others argue that those who subscribe to voluntary insurance are very frequent users, and that private use is not a substitute for ‘normal’ use –medium use in equal need– of what is publicly covered. If everyone considers private coverage as an overuse of health resources, it would not make sense to subsidize it fiscally; but yes, if it clears up some demands that would otherwise put even more pressure on public assistance.
We are always talking about effective cures that the public system does not offer, either because of the relative cost or because it includes useful elements that, being valuable, do not want to be covered one hundred percent from the public provision. A kind of co-payment where everyone pays first and the state pays you back later with a tax break.
In the fair terms of the debate, it can be said that the subsidy would never be at the nominal rate of the tax that deducts (yesterday the IRPF, today the Corporate Tax), and more so when not all companies can apply deductions due to the existing ceilings, or do not need them due to the accumulation of other fiscal expenses –as with post-crisis losses–.
On the other hand, it is not easy to identify the degree of adjustment of the use caused by the waiting list or to additionally ensure both, in equal need, an essential fact to make a good comparison. Without rationing via prices, the opportunity costs of one or the other to ‘queue’ depend on many factors, and not all of them linked to social status, such as age, the fact that they are self-employed or salaried professionals, the patient’s risk aversion, or the anguish caused by the disease.
In any case, the eternal problem of how the public system deals with the treatment of something diagnosed privately remains with the complementary insurance. In a similar way with respect to the prescription of medicines from professionals who, legally, make public and private assistance compatible. We know that these are a source of inequality, but that the system does not know how to confront them and simply ignores them.
It must be said that, in any case, what the public system does not provide in accordance with the patient’s expectations –not because of lack of effectiveness, but because of high cost– is not prohibited in a democratic society. And it is that, if whoever wants to access it must do it privately, perhaps it is better to give it a controlled route. An insurance premium is always more supportive than a direct payment (because whoever is luckier and does not need coverage subsidizes whoever is worse off), and regulating premiums outside of individual actuarial risk, doing it collectively, as in company premiums, has to be more redistributive than doing it in individual terms.
Finally, the association often postulated that the greater the voluntary insurance, the less willingness to pay taxes to maintain the public health system does not seem clear. If even that hypothesis is no longer clear, even in a country like Sweden, where voluntary insurance has grown a lot –there at times of falling taxes–, perhaps even less so in our country, at a time of increasing tax pressure. That there was no such association could be due to the fact that private insurance complements less serious services, and confidence in the capacity of the public system for more complex pathologies is maintained.
In conclusion, under the above premises and the current state of public health financing, complementary private health insurance in effective health benefits should, where appropriate, be deductible from both personal and legal person income tax. And if the mentioned conditions do not apply, it should not be so in either of the two cases.
