Healthcare Costs

The Dividend Growth Investor tweeted us the other day if we had a post on healthcare in the Netherlands. In fact we don’t, we only briefly touched on the subject on this post. Considering that healthcare costs will represent about 10% of our total spend during FI, it’s probably not a bad idea to have a look at these healthcare costs.

Healthcare Insurance

The system today is very simple, you have to mandatorily insure yourself for healthcare costs (when you are a resident of the Netherlands). From that perspective it is probably similar to “Obama care” in the US. Beside you having to mandatorily insure, the insurer has to mandatorily accept your request to insure. You cannot be refused based on your medical condition, which is a great thing to have when you are ill.

The mandatory coverage is required when you become 18 years of age, kids below this age are automatically covered under the insurance of their parents. Further, if you have a low income there are benefits to aid you in paying this mandatory insurance.

Basic Coverage

You have the option to select various package as far as coverage is concerned. The “basic” package for 2017 covers you for visits to a general practitioner (Dutch: “huisarts”), hospitalizations/operations, medication, physiotherapy for kids under 18; dental works for kids under 18, child birth, dietary advice and a few other items.

Additional coverage

There is a volunatry option to increase coverage for, amongst others, adult physiotherapy, alternative medicine, psychology, glasses and lenses, dental and certain specific child birth expenses.

Healthcare Costs

Healthcare Costs
Source: http://www.gs1.org/healthcare

Healthcare Costs

Basic healthcare costs will set you back around €92-100+ per month (subject to the provider and terms & conditions of coverage). This is in combination with a mandatory deductible of €385 per person per year. When you increase this deductible to €885 per person per year costs for basic covers drops to around €77-85 per month.

In principle all actual expenses will come out of the deductible first, with the exception of costs associated with general practitioner visits (but not any meditation of bloodwork following the visit!), dental for kids under 18, child birth costs and a few other items.

Additional coverage

The costs for additional coverage vary significantly depending on what you want. But generally ranges between as little as €5 up to €50 per month.

Dental Coverage

Dental work for adults are covered under additional packages. Depending on the package you choose, you can get coverage of up to about €2.000 per year per person (the rest will generally come out of your own pocket). If you only need minor dental work or just check-ups, coverage to about €250 per person per year is usually sufficient. Orthodontics are covered separately in some cases.

Fees for this range €8-50 per month depending on the coverage amount.

Team Cheesy Coverage

Our coverage is with Anderzorg (a Menzis company, no affiliate link here) as they appeared to have the best value for money for our situation. We pay €181.90 per month for the three of us. We have additional dental coverage for €250 per year for the both of us. Our deductible is at the maximum allowable €885 per person, as you probably figured out already.

In short, with no use of the deductible, we pay almost €2.183 per year. We generally budget for around €2.500, which would be about 10% of our FI budget.

Insurance Conditions

Most insurers don’t make lots of money on the basic healthcare insurance coverage due to the competitive market. This is great for the consumer, as you pay really about cost price for this insurance.

However, insurance companies found ways to make your life difficult. Medical care is sometimes only permitted at designated medical institutions with which the insurer has a contract. It could therefore be that you have to travel for certain medical procedures. When you have opted for coverage with a limited number of medical institutions, you could also run into waiting lists issues for certain procedures. Keep that in mind or pay more premium to have free choice in hospitals. It’ up to you.

Future Healthcare Costs?

Now that the basics of the Dutch healthcare insurance are covered, the next logical thing to do is take a look at the development of costs over the past years. We need this to allow us to make calculated predictions where this is going. This will be covered in a post we have planned for next week. Stay tuned!

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14 comments

  1. “Obama Care” or the UNaffordable health care act as I prefer to call it, is a complete and utter disaster. Prior to my husband switching jobs (primarily for insurance reasons) my husband and I each had a $6500 yearly deductible to meet. We were also paying $100 per week for this garbage private insurance. A fall and broken bones caused me to max my portion out. Another often overlooked effect was companies giving pay cuts when the bill was passed. The company I worked for at the time gave a 10% pay cut across the board, even to those of us who didn’t use their health care benefit. I pray that President Trump makes good on his promises and actually does something about this disastrous act.

    1. Wow, that is a lot of money for a deductible. Can imagine that this makes you rather frustrated. That being said, it would be good to have a system that provides universal healthcare, should be one of these “free for everyone” things. Same as education. Curious to see what will happen.

  2. You forgot to mention that every employer in the Netherslands also pays 6,65% of the employees paycheck.
    Let’s say you make 50k, your employer pays 3325.-. Add your own pay i.e 1200 + mandatory deductible 385.- and the yearly cost are almost 5000.
    The 6,65% the employer pays is hidden quite nicely

    1. Hey Jos,
      Intersting note! Guess this 6.65% is covered under “social premiums and taxes”, but you could argue that it comes directly out of your paycheck too.
      Thanks for the comment.

  3. Upon arriving in Australia I had to pay $2000 for a 2 year health insurance policy. Not exactly sure what it covers, but it’s pretty useless. Seeing the doctor costs $50 and they only reimburse you $16. At this rate I might as well not buy insurance and just pay everything out of pocket.

    1. You never know, if something really bad will happen (and I hope it does not!) it might still be worth the money. Healthcare insurance is one of these things that you hope you never need, but when shit hits the fan, you are glad you have it. That being said, $2000 Australian does not feel like too much for 2 years, but it does depend on what it covers as you already noted. Good luck!

  4. Thank you for writing this series of posts. I find it helpful to see how other countries are doing their healthcare. The US healthcare system is a mess. We pay close to $100/month for health insurance through employer, who then covers the rest by paying 2 – 3 times that amount monthly. We have a $4,000 – $7,000 deductible too. It is ok if you do not need it and are generally healthy. But last year we did need it, and it was a nightmare ;-(

    Perhaps we should move to the Netherlands when we retire…How is the housing situation there?

    1. You are very welcome, was about time that this topic was reviewed in more detail om our blog. So thanks for the hint! Wow, never realized that healthcare was that expensive in the states! What a massive deductible, can imagine that hurts when you need to use it. Hope everyone is healthy again now?
      The Netherlands is a great country, but we always look at the states in disbelief how great you guys have it tax wise. Guess the tradeoff is the healthcare cost and social systems.
      Housing is expensive here, small country, lots of people = high prices. Eastern and northern parts are not too bad, but you are probably better off moving to Germany. Houses are typically also a lot smaller. But you do have the USD massively working in your favor at the moment.

  5. Last year I was not very happy to find out that most costs come out of your pocket. Last year was an extremely expensive/heavy year health wise and even then I didn’t make the lowest threshold (375EUR?) so I ended up getting the biggest deductible as well. Now I pay 97EUR-ish for basic + some additional costs. We’re now in April and it still works fine for me. 🙂

    1. Glad to read that 2017 is working out well for you, both financially and health wise. Good to know that you did not even cleaned out the deductible in a bad year. But be careful, one ambulance ride or one night in the hospital and you could already clean out the financial room in your deductible (might even clean out the maximum deductible of €885!). What I’m saying is don’t get hit by a bus 😉

    1. Up to the deductible, of course. Actually you’d be surprised what I’ve found out, “we” only pay about 20-25% of the total cost of healthcare ourselves directly. The other part is covered via taxes. More on this next week.

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