Natalia Sidelnyk

The most significant problems in financing the public health system in Ukraine are the permanent deficit of public spending on medicine and the shallow development of the voluntary health insurance market. The aim of study is the search of optimal interactions between stakeholders in the system of relations “state – insurance companies – households” in the context of voluntary health insurance. The study hypothesizes that households can become more active participants in health insurance only if their average monthly income reaches a certain threshold level. It is calculated based on the results of simulation games using the Brown-Robinson iterative method. According to the simulation results, this threshold level is only 7% higher than the actual value of the average monthly income of Ukrainian households during the analysis. At the same time, under this condition, the state in Ukraine will be able to transfer part of the financial burden of compensating healthcare costs to insurance companies. According to the calculations made with the help of the game theory toolkit, with the maximization of insurance payments to the population under health insurance contracts, the burden on public health financing in Ukraine could be reduced by 67.7%. The paper was conducted on the data of the ten most potent insurance companies of Ukraine as of 2021 (it is they who accumulate the lion’s share of household insurance premiums), that is, before the start of a full-scale war between the Russian Federation and Ukraine. The obtained results can be used both by insurance companies during the management of insurance premiums and payments and at the level of state management of costs in the field of public health.

Acknowledgment
This study was undertaken as a part of the research projects granted by the Ministry of Education and Science of Ukraine: “Socio-economic recovery after COVID-19: modeling the implications for macroeconomic stability, national security and local community resilience” (registration number 0122U000778); “The impact of COVID-19 on the transformation of the system of medical and social security of population: economic, financial-budgetary, institutional-political determinants” (0122U000781).

The paper examines, using the example of Ukraine from 2003 to 2020, how and to what extent the development of various segments of the insurance market (risk insurance, life insurance, and reinsurance) influences the overall level of social progress. It also identifies the time gaps through which this influence manifests. The study creates a single measure that looks at various aspects such as social class differences, spending patterns, income changes, and government social spending (their standardized values, weighed by the principal component method, integrated through additive convolution). Using VAR modeling, the impact of the development indicators of different segments of the insurance market (risk insurance, life insurance, and reinsurance) at the current moment and with lags of one, two, and three years is investigated, as well as the level of social progress in Ukraine in previous years. The modeling confirms that social reforms yield significant results for social progress only after three years, similarly to the increase in the number of insurance companies. Given insurers’ assets and payout levels, their growth in life insurance has a faster impact on social progress than in risk, while the opposite is true for premiums. Insurance premiums transferred to Ukrainian reinsurers negatively and slowly (over three years) affect social progress, and to non-resident reinsurers – positively and faster (within a year). Across most indicators, life insurance not only influences Ukraine’s social progress more quickly than others but also provides a more substantial social effect.