however these market failures imply that competition alone is not sufficient to guarantee cost control and that measures are also needed to improve the functioning of the market both on the supply and on the demand side this replaced a dual system where public insurance was mandatory for about twothirds of the population while the other third relied on voluntary private insurance in the new system all citizens have to pay a flat rate premium freely set by the insurer to their chosen health insurer and an incomerelated contribution to a riskequalisation fund which covers of total health expenditure