The Netherlands will spend an extra 300 million euros ($361 million) to boost consumers' purchasing power by not lowering government assistance for health care, the prime minister said on Sunday.
Roughly 5 million households in the Netherlands receive the assistance and will benefit from the move, Prime Minister Jan Peter Balkenende, whose Christian-Democratic party has slumped in opinion polls, said ahead of local elections on Tuesday.
Opposition parties have pushed hard in recent months to help consumers even as the Dutch economy is expected to grow about 2.5 percent this year, recovering from a 2003 recession.
Balkenende told political TV talk show Buitenhof that government assistance for health insurance should normally be lowered mid-year because insurance premiums came out lower than expected.
"The cabinet now plans to keep the assistance at the same level despite the fact that it should be lowered. We do that to have a smoother introduction of the health insurance system, and it also has positive effects on purchasing power," he said.
The Netherlands switched to a new private but heavily regulated health insurance system on January 1. The government offers assistance to lower income earners because their premiums rose steeply under the new system.
The assistance is based on income and not according to premiums paid and was fixed before insurers set their premiums, which came out lower than expected.
Balkenende said another reason for the move was that the government planned to adjust the assistance level only once a year in the future.
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