(1)

Health care insurance in the Netherlands will be reformed from January 2006. A new compulsory basic social insurance scheme will cover a large part of health care for the total population, and it is expected that about 37,5 % of the total population will be moved from private insurance schemes to the new social insurance scheme (thereafter referred to as ‘the reform’).

(2)

The reform introduces a fundamental change in the organisation and institutional structure of the health care system. Its treatment in the Harmonised Indices of Consumer Prices (HICPs) must be appropriate, consistent with the HICP legal framework and in particular the following Regulations:

and result in HICPs that are comparable, reliable and relevant.

(3)

The HICP legal framework does not handle explicitly and specifically the case of this reform, which involves fundamental changes in the eligibility and access rules for social insurance. Taking into account the potential impact on the HICP, and the consequent uncertainty for users, the Commission considers it necessary to issue a recommendation, regarding the treatment of the reform in the HICP to clarify the existing HICP Regulations.

(4)

For measuring changes in consumer prices, the HICP legal framework requires that the HICP should take account of changes from zero prices to positive prices and vice versa. A reading of this requirement in isolation might indicate that the HICP should record a very substantial fall in inflation as a result of this reform. However, in the context of this reform, the Commission (Eurostat) considers that such a treatment would show an unwarranted price change as a consequence of pricing transactions using different valuation concepts.

(5)

The valuation of health care expenditure in the HICP (COICOP/HICP 06) (6) is conditioned on the treatment of health insurance (COICOP/HICP 12.5.3).

(6)

Social insurance does not fall within Household Final Monetary Consumption Expenditure (HFMCE) either before or after the reform. The reform results in a significant reduction in the population covered by private insurance schemes.

(7)

The per capita consumption volumes for health care remain in principle unchanged from those in the base or reference period, but the composition of the consumer population and the valuation concept both change in the periods being compared as a result of new eligibility and access rules for the health insurance schemes.

(8)

The impact on the HICP, as from the January in which such a reform takes effect, of consumers moving to the new social health insurance scheme, should thereby be approximately neutral for the HICP.

(9)

The Commission considers that such treatment does not call into question the treatment of earlier examples of changes from zero prices to positive prices and vice versa (e.g. TV licence abolition of 2000 and health insurance reform of 2004 in the Netherlands, or the health care reform of 2004 in Germany).

(10)

The Commission (Eurostat) has taken into consideration the views of key HICP users and national HICP experts with regard to the above,