The challenge of longevity and the commitment to intergenerational solidarity

The current demographical transformation, marked by a society with longer life expectancy and with growing medical requirements, has led most insurance providers to promote premium models based on the personalisation of the individual risk age, clinical history, habits or predicted use of the services. This focus, although maximising the economic efficiency in the short term, has a direct impact on the most vulnerable groups.

“Extreme personalisation breaks with the insurance’s founding logic as a mutual protection mechanism. When the premiums increase exponentially with age, it ends up generating an expulsion effect for the people who most need medical care.” This is one of the main conclusions reached by Vitor Molina, actuarial head of Assistència Sanitària, at the conference “The challenge of longevity on healthcare insurance policies,” organised by the Professional Association of Actuaries of Catalonia.

At the conference, it was shown that this effect does not only have individual implications, but also group ones: people who, once they have retired and have a more limited income, are incapable of assuming growing premiums and therefore, remain outside the private healthcare system at a time when they are most vulnerable.

Within a context of growing territorial inequalities and a constant increase of the population of over 70 years of age – which has risen 9 percent since 1975, this phenomenon takes on a special dimension.

The alternative answer, based on intergenerational solidarity

Against this backdrop, Assistència Sanitària is applying a different formula. The organisation, created by doctors with a vocation for serving patients and controlled by a cooperative, maintains an updating model of premiums that avoids the rate from increasing due to the individual use of the services. The cornerstone of this system is the intergenerational solidarity rate, a mechanism that partially redistributes the cost of the risk linked to age.

In spite of it being less attractive in terms of economic efficiency or maximisation of profits, Dr. Ignacio Orce, Chairman of Assistència Sanitària, defends the fact that opting for this formula “is an act of group responsibility and sustainability of the actual healthcare model itself.” He also affirms that “the idea is not for some people paying for others, but rather that everyone contributes to a system that will protect them in the future.”