Report of the Royal Commission on National Health Insurance

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Monograph

Identifikator:: 1740277147

URN:: urn:nbn:de:zbw-retromon-132094

Document type:: Monograph

Title:: Report of the Royal Commission on National Health Insurance

Place of publication:: London

Publisher:: Stationery Office

Year of publication:: 1926

Scope:: XII, 394 S.

Digitisation:: 2020

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter VII. The financial resources of health insurance scheme

Collection:: Economics Books

5 MAJORITY REPORT. estimated to be equivalent in value to the benefits in the case of persons entering into insurance at the age of 16. The liabili- ties undertaken were, however, of such a kind (since the average annual duration of sickness and disablement grows with age) that the contributions so determined were insufficient for persons becoming insured at all ages between 17 and 70, such persons comprising, of course, the vast majority of those who became compulsorily insurable at the outset. To provide for the deficiency the State undertook to meet the charges under the Scheme in respect of two-ninths (the original fraction in the case of women was one-fourth) of the cost of benefits and administra- tion, leaving the Societies responsible for seven-ninths of the cost. The effect of this was to enable two-ninths of the whole income from contributions to be retained by the Central Departments and applied to meeting the extra liability arising from the element of age as explained above. It then remained necessary only to make such arrangements as would enable each Society to receive a proportion of this income commensurate with the ages of its own members and the consequent share of the total liability which it had undertaken. This was secured by granting for each person who entered into insurance at an age over 16 a reserve value representing the liability arising in his particular case, according to his age, and by directing that, from the retained income, interest on these reserve values at the rate of 3 per cent. per annum should first be provided, the balance of the retained income of each year being applied as far as it would go to redeem the reserve value credits still outstanding. 161. It was originally estimated that the redemption would extend over 15} years, but as the result of alterations made in the Bill during its passage through the House of Commons this period was extended to 18} years. Further alterations were made in the Statute by the Acts of 1913 and 1918 and among them the Contingencies Funds of the Societies, and the Central Fund, were created by diverting to these purposes part of the moneys hitherto applied to the service of reserve values ; this diversion was made retrospective to the beginning of the Act. The effect was to reduce, very materially, the sums available for the redemption of reserve values and to extend the estimated period of redemption to about 35 years. 162. Later, changes came about in the position as to reserve values as the result of the increase of benefits and contributions made by the Act of 1920, and, in minor degree, as the result of the revision of the financial provision made for married women by the Act of 1922. 163. Lastly, by the Widows’, Orphans’ and Old Age Con- tributory Pensions Act, the responsibility of the Approved Societies to provide sickness and disablement benefits to insured persons of ages between 65 and 70 was removed as from J anuary, 1928, with the effect of diminishing the aggregate amount of

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