Origin of health insurance

At the moment, the coverage of medical costs in the Netherlands is well settled. However, this has not always been the case. The Dutch health care system has gone through a long development, with a history that dates back to the eighteenth century. On this page we discuss the origin of health insurance in the Netherlands.

The first health insurance

All things considered, the old trade guilds already had a system, which can be seen as the precursor of the modern insurance policies. Through their health money-box, also called ‘guild collecting-boxes’, the guilds could support their members financially with medical expenses if they could not pay for it themselves.

Around 1780 the first real health insurance funds were introduced by the commercial insurance companies of that time and focused mainly on the less fortunate in society. This enabled low-income households to insure themselves for the first time, so they no longer had to reach out to the ‘Poor Fund’ of the church or the Poor Law of their municipality in case of an emergency.

Doctors and workers

The General Health Insurance Amsterdam (AZA) was founded in 1846 by doctors and pharmacists. This gave policyholders the freedom to choose their own physician. But the AZA also introduced an income limit that distinguished between the public and the private health sector. The General Health Insurance Amsterdam became one of the biggest players for policyholders belonging to the working class.

Labourers united

In the second half of the nineteenth century most of the carpenters from Amsterdam were also insured by the General Health Insurance Amsterdam (AZA). In 1874, they teamed up to hand in an official request with their insurer, which included the proposal to use part of the premiums for investing in affordable public housing. The Board of the General Health Insurance Amsterdam did not cooperate, and pushed this proposal aside with the following comment: “Let the labourers rather focus on their work, than engage in this kind of otiosity!”

This comment was obviously not well received and caused the carpenters and others from the working class to establish their own insurance company. They founded the General Mutual Health Insurance by and for labourers, which would mainly represent the interests of the working class.

Subsequently, several funds have been established that represented the labour movement and gave them more and more control about health care. Together with the unions they formed an important player within the world of health insurances. Around 1900, employers also founded the first insurance funds for their employees.

First legal regulations health insurance

In 1905 the former Dutch administration led by Prime Minister Kuyper took part in the discussions surrounding the social insurance system in the Netherlands for the first time.

Although an earlier initiative by the government did not succeed, the interference of the government ultimately led up to the creation of the Royal Dutch Society of Medicine (KNMG). The KNMG offered the first general insurance packages through their own arrangements and health care contracts. This enabled low-income households, albeit at a limited extent, to get insured against the costs of basic care facilities.

The coverage of these general health insurance policies of the KNMG were still fairly limited compared to the current basic health insurance packages. For example: hospitalization was not insured yet and when someone was not able to pay for hospitalization, he or she still had to invoke the Dutch Poor Law.

Mandatory health insurance: a German initiative

Around 1940, at the beginning of World War II, roughly two-thirds of the Dutch population was medically insured to a greater or lesser extent. It was during the occupation that health insurance was made mandatory for all Dutch residents. In 1941 the German system of the so called ‘Krankenkasse’ was also introduced in the Netherlands. From that moment on, everyone under a certain income level was obligated to become a member of the health insurance fund.

After the occupation, the government decided to keep the system of a mandatory health insurance fund. Certain services were added to the healthcare packages, which extended the coverage of health insurance considerably. The health insurance institution was being professionalised. Small insurers merged with large insurance companies, which brought the total number of insurers back from 200 to several dozen in the Netherlands. The difference between the private and the public health insurance sector, however, continued to exist.

A basic health insurance for everyone

In 1974, State Secretary Hendriks of Public Health initiated an open discussion about the differences between the public and private health insurance. The central question was whether this distinction was still desirable. The idea to have a general basic health insurance for every resident of the Netherlands, regardless of income levels, was discussed.

It proved to be an interesting topic that could not be easily dealt with. A proposal by State Secretary Simons for a general basic health insurance at the beginning of the 90’s stranded. In 2001 Minister Borst tried again with the memorandum “Supply and Demand”.