Long-Term Health Insurance Model Design With "No-Claim Bonus"

Under the background of "Healthy China" strategy,health insurance,as the payer of medical expenses,has a great market prospect.Major insurance companies have begun to explore the mode of "health insurance + health management",and their business strategy has shifted from post-compensation to pre-prevention.However,the current stage of development of health insurance in China has not solved the problems of high premiums and no insurance for people with diseases and elderly people.The emergence of urban customized inclusive products has alleviated this dilemma to a certain extent,but its sustainability is difficult to guarantee.In order to better solve the contradiction between the people’s urgent demand for health and the unbalanced and inadequate development of health insurance,insurance companies need to provide more abundant,diversified,personalized and sustainable health insurance products.Unlike short-term health insurance,which requires renewed health warnings and even check-ups every year,long-term health insurance has a guaranteed renewal period during which the insured can be covered regardless of their physical condition.This is a step forward for the development of the health insurance industry,filling the gap in the need for long-term health protection.However,there are many potential risks in long-term medical insurance,including a series of unpredictable risks such as diminishing selection effect,medical inflation,changes in disease graph,etc.,which cause great pressure on the health management of insurance companies.According to the advanced experience in the development of long-term medical insurance in foreign countries,the potential risks of long-term medical insurance are mainly solved from two perspectives.One is from the perspective of insurance companies,through the establishment of risk savings pool,compulsory insurance participation policy,the establishment of self-owned medical network system to solve the medical cost inflation,death spiral risk,diminishing selection effect and surrender risk faced by insurance companies.One is to solve the affordability problem of long-term medical insurance from the perspective of insurance holders by providing tax incentives,using medical savings accounts to pay premiums,and no compensation incentives.No-claim Bonus is a means of health management.When the insured does not claim for compensation,the insurance company actively pays the insured a sum of incentive money.Through the incentive money,the insured is encouraged to control the risk and improve the effectiveness of the behavior,such as exercise,forming a good lifestyle and so on.Non-indemnity reward can well urge the insured to regulate risky behaviors in daily life,reduce the probability of risk occurrence,control the scope of claims and reduce the waste of social resources,which is beneficial to both the insured and the insurance company.The physical condition of the insured is improved,the actual sense of gain is also strengthened,and the insurance company also achieves the purpose of reducing cost,controlling cost and increasing profit.Starting with long-term medical insurance,this paper establishes the basic insurance contract model and the insurance contract model with non-indemnity incentive factor.Through analysis and comparison,it concludes that the nonindemnity incentive factor has realized Pareto improvement on the insured,and further discusses the action mechanism of the non-indemnity incentive factor,which is to improve the utility value by improving the actions of the insured to control risks.After drawing the conclusion that the non-indemnity incentive can indeed improve the utility of the insured,this paper simulates the future business environment under the realistic assumptions such as medical inflation and puts forward a set of long-term medical insurance rate table with balanced premium.Finally,the paper discusses the practical significance of non-indemnity reward and puts forward some suggestions for the development of long-term health insurance.