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

MAJORITY REPOR', an Appendix on pp. 330-383. With reference to the first and principal of these Reports it will be observed that the Committee was asked to advise ‘‘ as to whether the present basic con- tribution under the National Health Insurance Acts is, in fact, required for the existing benefits (including the cost of Societies’ and Insurance Committees’ administration) or whether such a re-arrangement of the financial basis of the scheme would be justified as would reduce the amount allocated to the present benefits and leave a margin for other purposes.”’ 173. The Report of the Committee shows that they have systematically analysed every element which enters into the financial basis of the system. It is unnecessary for us to traverse the whole field of their deliberations and we content ourselves, in this connexion, with a reference to two of the most important points with which they had to deal, namely the rate of interest at which the funds of the Approved Societies may be assumed to fructify hereafter by investment, and the rates of sickness and disablement to which the individual insured persons should be taken to be subject (on the average) as they pass from age to age. 174. On the first of these points the Committee bring out the fact that on actual securities (including securities representing the moneys in the National Health Insurance Investment Account which are held by the National Debt Commissioners) the average rate of interest at present yielded is between 43 and 5 per cent. These securities represent about 55 per cent. of the interest-bearing assets, the remainder being accounted for by reserve values, which, under the plan described above, carry, by statute, the rate of 3 per cent. The average rate obtained in recent years has thus been something under 4 per cent. The Committee go on to explain, however, that the real funds are continuously increasing in amount while opportunities of investing the increments at high rates of interest remain, and for a long period are likely to remain, abundant ; and that on the other hand the low-yielding reserve values have been heavily diminished by the provisions of the Widows’, Orphans’ and Old Age Contributory Pensions Act of 1925, and will be reduced still further by other changes, resulting partly from the Committee’s proposals and partly from the cancellation or redemption of several millions of these credits in the application of the regulations as to balances in the Reserve Suspense Fund. They have, therefore, satisfied themselves that the average rate of interest obtained will immediately rise above 4 per cent. and they expect it to remain at or about that figure for the next 30 years, after which an opportunity for recon- sideration of the rate will, in any case, present itself. They accordingly propose that in the new financial basis of the system the rate of interest taken shall be 4 per cent. per annum instead

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