Why is duality mandatory for existence?

Overtaken the duality of statutory and private health insurance?

Germany is currently the only country in Europe with a coexistence of two full health insurance systems. The demographic development combined with a questionable acquisition strategy, the financial crisis and the introduction of compulsory insurance had put private insurance companies in particular into trouble. The authors argue here for different paths towards a uniform health insurance system in Germany.

The creation of a uniform health insurance system - a long overdue reform

Klaus Jacobs

From an economic point of view, there is no convincing justification for the internationally unique duality on the German health insurance market with a coexistence of statutory and private health insurance as substitutive full insurance systems. The Economic Advisory Council points this out in almost every one of its annual reports - albeit with an increasingly resigned tone, because no federal government has so far followed its recommendation to create a common competitive market for the entire population, whether it is red, green or black - was composed of red or black and yellow.

However, this could possibly change soon, because of all things the private health insurance system, which has long been considered future-proof due to its private-law organization and the funded procedure - and not the supposedly "ailing" public-law system of statutory health insurance (GKV) - gets into increasing difficulties and needs continued political support. For example, the options for high-income employees to switch from statutory health insurance to private health insurance have recently been expanded, private insurance companies have been involved in measures to limit drug spending, and agency commissions have been capped by law. However, private health insurance is by no means free of worries: In view of a possibly longer period of low interest rates, there is a risk of additional premium increases, and it is also not foreseeable how the growing number of insured persons who can no longer pay their premiums will be dealt with; the envisaged “non-payer tariff”, which only provides for emergency services, hardly corresponds to the intentions of the legislature when the general compulsory health insurance was introduced. This does not even mention the biggest problem of private health insurance: the extensive inability to specifically manage services and expenses as a result of a lack of direct contractual relationships with the service providers. The PKV would like an opening clause in the fee schedule for doctors, but negotiations on this with the medical profession have just failed again.

Superiority of a uniform insurance system

So the chances could not be bad that in the foreseeable future - as in 2006 in the Netherlands - we too could see a fundamental reorganization of the entire insurance market. Apart from doubts about its long-term sustainability, why is it not advisable to take isolated measures to solve the various problems of private health insurance? Not only the German Economic Advisory Council sees “a health insurance system, in which all citizens are obliged to take out insurance, to be superior to the current system with its segmented health insurance market, both from an allocative and from a distribution point of view. Currently, the market is being segmented mainly due to the existence of the compulsory insurance limit (...) and there is an inefficient risk segregation at the expense of the statutory health insurance. In addition, people with an income above the compulsory insurance limit, as well as civil servants and the self-employed, can evade redistribution in the health insurance system, which is why, from a distribution policy perspective, it appears necessary to abolish the compulsory insurance limit and establish a uniform health insurance market. "1

The distribution-political effects of the compulsory insurance limit, which contradict every common norm of justice, have already been described many times: For young and healthy employees it is worthwhile, according to individual benefit calculations, to turn your back on statutory health insurance and usually to take out private insurance at significantly lower prices. This directly weakens the solidarity community GKV, which - like any insurance, a social insurance with income-dependent financing especially - is dependent on a balanced risk mix of its insured body. The fact that many privately insured people regret their decision to opt for private health insurance at a later point in time and are themselves dependent on solidarity support - now possibly seriously ill and no longer as high-income as before - does not change the questionable nature of the distributional effects as a result of the existing market segmentation, but adds to it at best, add another facet.

Allocation deficits as a result of market segmentation

The fact that the existing market segmentation in GKV and PKV is problematic from an allocative point of view, above all, has to do with the different remuneration and control structures in GKV and PKV. For many doctors, it is far more economically attractive to treat private patients according to the private medical fee schedule without external quality requirements and quantity restrictions than those with statutory health insurance. As a result, however - to quote the German Economic Advisory Council once again - they are “not deployed according to their skills and medical requirements, but rather according to the insurance affiliation of the patients”, which “leads to a misallocation of scarce resources and quality deficits”. 2 The increasing gaps in care in rural areas are by no means - with simultaneous high and oversupply in medium-sized and large cities - an expression of a general shortage of doctors, but the result of a blatant unequal distribution, in which the regional distribution of the privately insured does not play a minor role. The measures taken to solve the rural supply deficits, however, only lead to additional expenditure for the contributors in the statutory health insurance system, although the privately insured in sparsely populated regions also benefit from comprehensive guaranteed health care.

What is remarkable in the discussion about the future of health insurance in Germany is, on the one hand, the persistence with which the segmentation of the health insurance market is maintained according to allocation rules and options that can only be explained historically, and, on the other hand, the questionability of the reasons given. For example, the coalition agreement of the incumbent federal government says: "In addition to statutory health insurance, private health insurance as a full and supplementary insurance is a constitutive element in a free health system." 3 This sentence can also be found in a section beginning with "Competition in Health Insurance "is overwritten.

Dysfunctional "system competition"

Freedom and competition are truly honorable goals. But what, according to the generally accepted understanding, is “free” and “competitive” in our segmented insurance market if the vast majority of the population has no legal or factual options? Around three quarters of the German resident population are compulsorily insured as members or their co-insured relatives in the GKV. The civil servants and their relatives entitled to subsidies are not legally, but de facto compulsorily insured, because in the case of voluntary GKV insurance they would have to pay the entire insurance premium themselves without employer participation. Many sick and disabled people are either not insured in the private health insurance in the first place or have to pay such high risk premiums that they can hardly afford the premiums. Ultimately, only relatively few young and healthy high-income earners and the self-employed have a real right to vote - but usually only in the direction of private health insurance and not vice versa. As a result, the competition between GKV and PKV is concentrated on these people. It almost goes without saying that a competition for young and healthy is hardly primarily about questions of the highest possible quality and at the same time economical health care.

Should private insured persons regret their decision in favor of private health insurance many years, if not decades later, when they are dependent on benefits, but at the same time are forced to reduce benefits or higher deductibles due to massive increases in premiums, 4 they are just unlucky. Or as the parliamentary state secretary in the Federal Ministry of Health, Annette Widmann-Mauz, put it in her answer to a small question in the German Bundestag in March 2012: “People who choose private health insurance generally make a life decision. They know that the insurance premiums in the private health insurance are independent of income and that a return to the statutory health insurance is only possible under certain strict conditions. In many cases, these people opt for the lower-contribution private health insurance system when they are young. ”5 Is this fact, which is well described, really an expression of a“ liberal ”system that is worth maintaining in the interests of the majority of the population?

In view of the highly distorted competitive conditions between GKV and PKV and the content of the competition, which is rather dubious in terms of supply content, Thorsten Kingreen described the description of the relationship between GKV and PKV as a "system competition" at this year's German Jurists' Day as a camouflage, 6 which, according to Duden, means something like Camouflage or disguise. Whether the proponents of the supposedly in the general interest system competition between GKV and PKV want to blind others above all or are possibly blinded themselves - it always seems questionable when proposals for the introduction of a uniform health insurance system - as repeatedly made by the Economic Advisory Council - be discredited with political fighting terms such as “envy debate” or “unified fund”.

Solidarity financing: by everyone, for everyone

The charge of the “envy debate” is directed against the demand for the entire population to be included in the solidarity-based financing of health insurance protection in order to counter the problematic distributional effects of the existing market segmentation. Nobody has ever claimed that all privately insured people are "rich". This certainly does not apply to many small civil servants and solo self-employed. Nonetheless, the average income of those with private insurance is roughly twice as high as that of those with statutory insurance. There are almost no unemployed or small pensioners among the privately insured, and the income of “minor civil servants” is not abundant, but at least permanently secure. Of course, the inclusion of all residents in solidarity financing by no means solves all future financing problems of the solidarity community, but it does strengthen their financial basis. In addition, it also benefits those privately insured persons who may have had a high income at the time of their decision in favor of private health insurance, but who suffer increasingly from high premiums in old age due to unfavorable living conditions - whether through their own fault or not.

In this context, it is often argued that the higher fees of private patients represent a kind of “cross-subsidization” of the statutory health insurance and its insured persons, because the maintenance of the German care system depends on it. This is worth at least as much as a direct participation of the private insured in the solidarity financing. However, this argument is incorrect in two ways. On the one hand, the "regular" participation of the privately insured in solidarity financing - in the status quo via income-related health insurance contributions - could lead to a reduction in the contribution rate even if the service providers did not have to accept any compromises in terms of fees compared to today. On the other hand, the distribution of the fee payments is completely hidden. As the example of care in rural areas shows, a large part of private medical fees does not go where the money is primarily needed. From the point of view of a resident doctor, the financing of his practice is certainly often dependent on the sometimes significantly higher income from private medical activity, but whether this also applies in the same way to the health care system as a whole is a completely different question - not only from a regional point of view, but also with regard to the relationship between general practitioner and specialist care.

Dedicated competitive orientation of the uniform insurance system

The second accusation of the supposed "uniform health insurance company" completely fails to recognize that a uniform health insurance system is usually a decidedly competitive system from which - unlike the so-called system competition - all insured persons can benefit through higher quality and efficiency of care. This not only corresponds to the ideas of the Economic Advisory Council and numerous German health economists, but was also the declared aim of the health reform in the Netherlands. The Dutch Ministry of Health names the three "core elements" of the reform to create a uniform health insurance system that the insured have the right to change insurers annually, that the insurers compete for the favor of the insured and that the customers and insurers choose the providers of care This means that there is not only intense competition between health insurers - German private insured persons can only dream of an annual right to switch - but at the same time, due to direct contractual relationships, there is equally intense competition between providers of care services, in which the quality and cost-effectiveness of health care take center stage.

These core elements of the Dutch health system would have to be included in a future uniform health insurance market in Germany in any case. For this reason alone, its basic structure would have a lot more in common with the GKV, in which the health insurers play an active role as providers of care ("players"), while the private insurers are limited to a role as pure "payer". Funding, which is often seen as a great advantage of private health insurance, is of little help here, because only a small part of the increase in expenditure in health care is actually purely demographic. The answers to questions about the medical necessity and appropriateness of diagnostic and therapeutic services and the most efficient forms of service provision are left to the PKV, however, mainly to the service providers and to some of the insured persons who are then mostly directly confronted with an illness, but their respective calculations are certainly not primarily geared towards the long-term sustainability of the insurance system.

Other elements of the uniform health insurance market, on the other hand, can be designed differently. This also applies to the question of the contribution (rate) structure, which has been deliberately excluded here. Of clearly subordinate importance is the question of the legal constitution of health insurance companies. In the Netherlands they are organized under private law, but they have never been public law institutions there either. If it served to create a uniform health insurance market, there would ultimately be nothing against health insurance under private law - for example as mutual insurance associations. However, starting the reform process in isolation would be just as wrong as welcoming the convergence of the GKV and PKV insurance systems, which has been observed for some time now, as such. Untargeted convergence leads, at best by chance, to a consistent organization of the health insurance market that is oriented towards the interests of the insured and patients. This orientation must be by far the most important core element of a reform: serving the interests of the majority of insured persons and patients and not the particular interests of individual branches and professional groups. Both do not work at the same time.

  • 1 Advisory Council for the Assessment of Macroeconomic Development: Annual Report 2004/05, Bundestag printed matter 15/4300 of November 18, 2004, Item 34.
  • 2 Ibid, paragraph 492.
  • 3 growth. Education. Cohesion. Coalition agreement between the CDU, CSU and FDP. Berlin, October 26, 2009, p. 86.
  • 4 According to a recent survey, almost 30% of all privately insured persons and even almost 50% of privately insured pensioners have changed their tariff (benefit reduction or increased deductible) with the aim of reducing their contribution over the past two years. Cf. K. Zok: GKV / PKV in comparison - the perception of the insured, in: WIdOmonitor, edition 2/2012, p. 4 f., Http://www.wido.de/wido_monitor_2_2012.html.
  • 5 Answer to a small question from the MPs Harald Weinberg et al. and the parliamentary group DIE LINKE, regarding “non-payer tariff in private health insurance”, Bundestag printed matter 17/8757 of March 15, 2012, p. 7.
  • 6 69th German Juristentag Munich 2012: Theses of the experts and speakers, p. 28, http: //www.djt.de/ -> Thesen69.djt.
  • 7 Ministry of Health, Welfare and Sport (the Netherlands): The new health system in the Netherlands. Sustainability, solidarity, decision, quality, efficiency, The Hague 2006, p. 7.

Legal and illegal ways to get citizen insurance

Friedrich Breyer

The coexistence of statutory and private health insurance that we practice in Germany is unprecedented in the world and cannot be explained by any conscious design principle, but only by historical coincidences. Particularly bizarre is the division of the groups of people for whom one or the other system is responsible, for example the fact that civil servants must belong to private health insurance (PKV), or the option for the already privileged in society, the high-earning ones Employees.

In the 2013 federal election campaign, the subject of “citizens' insurance” will therefore again be played as a trump card by the current opposition parties. This could sting, because the majority of the population does not understand that two-class medicine is still practiced in Germany in the 21st century. The business model of private health insurance has also been criticized more and more frequently in recent times by economists and even from private health insurance.

This article first recapitulates the advantages and disadvantages of reforming the division between statutory health insurance and private health insurance. Then the question is answered: If citizens' insurance is sought in the basic provision, how can the transition be made legally? The answer turns the deadlocked political positions in Germany on their head, because it reads: ideally by introducing a flat rate per capita in the statutory health insurance.

What speaks for and what against a citizen insurance?

In the following, the term “citizens' insurance” is understood to mean that the entire resident population is included in the compulsory insurance in the GKV, whose catalog of benefits covers the basic provision. This means that no statement has yet been made about how the contributions to the statutory health insurance are collected. In such a system, the task of offering supplementary insurance for services that go beyond the basic provision could be entrusted to private insurance companies, as is already the case today - not only in Germany.

Arguments in favor of citizens' insurance

First of all, the principle that state coercion in a free society can only be justified by the aims pursued thereby speaks in favor of the general population's compulsory membership in the statutory health insurance system. Of the goals of compulsory health insurance discussed in the literature,

  1. Efficiency gains with asymmetrical information on insurance markets,
  2. Vulnerability of low wage earners,
  3. Creation of equal opportunities with regard to the burden of disease,

however, only the third one can really convince:

  • Ad 1. The relevance of asymmetrical information for the risk of medical costs is low, since private insurance companies are very well able to determine risk differences between potential customers through health checks and to take this into account in premium surcharges.
  • Ad 2. The argument of the need for protection is used in the social law debate in Germany to justify the existence of a compulsory insurance limit with regard to (labor) income. In order to be able to understand that the state protects members of a group of people by forcing them to take a certain action which they would not voluntarily take, one must bear in mind that when the GKV was founded almost 130 years ago, it still largely obeyed the principle of equivalence and Sick pay accounted for more than 50% of their expenditure.1 Their main function was therefore to compensate employees for loss of income due to illness, at least in part. Higher earners were exempted from compulsion because the state trusted them to provide for the vicissitudes of life through savings.

Today this justification for compulsory membership in the GKV is obsolete: Since the sick pay only accounts for about 5% of the total expenditure of the GKV, the equivalence principle has given way to the principle of solidarity, according to which the low risks and the better earners care for the high risks and the Help finance the low-income. Insofar as this continues to be interpreted as protection of the last-named groups, the question immediately arises of how this can be guaranteed if those supposedly in need of protection only protect each other because many of those who could offer protection are not forced to become members.

  • Ad 3. Already at birth, differences between people with regard to the risk of disease can be recognized, and with the advances in genetic diagnostics and the spread of such tests in the prenatal area, the measurability of individual risks will become even more precise. In private insurance, these differences in risk are reflected in the premiums for health insurance, i.e. those who have already been endowed with less “health capital” by nature must also pay a larger amount of money for otherwise identical insurance cover.

In a world with health insurance competition, there are essentially two ways of leveling out this inequality in starting opportunities: on the one hand, differences in health insurance premiums that result in a market-based insurance system with risk classification can be balanced out in the tax and transfer system However, premium differences would be a very imperfect instrument, since differences in risk are only one of several reasons for premium differences. Others are the (quantitative and qualitative) scope of the service package and the efficiency of the insurance provider. In addition, there are considerable data protection and control problems if health information is to be used as a basis for risk compensation.

The other possibility of risk compensation consists in the obligation of all citizens to take out health insurance with a certain minimum scope of benefits - combined with an obligation to contract and a ban on discrimination for the insurance carriers. The obligation to contract prevents high risks from being excluded from the conclusion of a contract, and the prohibition of discrimination prevents differentiation of the premiums according to the individual risk. In order to make risk selection unattractive, the regulation of insurance companies is flanked by a risk structure compensation. This essentially corresponds to the German solution - with the difference that self-employed and well-paid employees have the choice between membership in the GKV and private insurance. As a result, however, the intended solidarity compensation loses its meaning if the most capable people can base their decision on membership on whether they (as high risks) benefit from the solidarity compensation or not.

In summary, of the three reasons mentioned, only the third, the ex ante balance between high and low health risks, remains as a valid justification for the existence of social health insurance with compulsory membership. However, the redistribution goal cannot legitimize compulsory membership if it is limited to a part of the population who is defined by their position in professional life (employed) or by their income, since such a limitation is neither plausible for reasons of equity nor promotes efficiency: It distorts the incentives to choose the work organization through the unequal treatment of self-employed and employees. Rather, redistribution is only legitimate if it has a universal character by extending the membership obligation to include the entire resident population, as is the case in Switzerland, for example.

The current coexistence of GKV and PKV is also deficient in medical care itself: Because of the different rewards for outpatient medical services, there is considerable cross-subsidization with a number of negative consequences: On the one hand, the economic success of a medical practice depends less on the quality of the services provided Benefits as from the proportion of privately insured persons in the catchment area. On the other hand, many doctors operate a pronounced oversupply of their privately insured patients because there is no quantity limit in the private health insurance system, while the income from the medical practice is largely flat-rate. Ultimately, patients get the impression of two-tier medicine because many doctors prefer privately insured people when making appointments.3 This can also have medical consequences for some diseases.

One argument against citizens' insurance: sustainability

In view of the dramatic demographic aging that is imminent in the next few decades, it is often not considered sensible to reduce the extent of funding in the health care system by including the entire population in the statutory health insurance system.4 After all, the private health insurance companies have set up provisions for aging in the three-digit billion range Dissolution in the future could make a significant contribution to bearing the demographic burden. However, this system also has weaknesses associated with the regulation of the aging provisions:

1. Only those increases in expenditure may be factored into the aging provisions that are associated with the increase in health expenditure with age with constant medical technology. The observable increase in expenditure due to medical advances, on the other hand, leads to ongoing premium increases despite capital formation.

2. Furthermore, Section 12 a, Paragraph 3 of the Insurance Supervision Act stipulates that the private health insurance companies must subsidize the tariffs of the over 65-year-olds to a considerable extent from the excess interest on the savings capital from the premium payments of the younger ones. This means that private health insurance also has to organize an intergenerational transfer and is thus - albeit to a lesser extent than statutory health insurance - negatively affected by demographic change.

3. Even after the reform of 2009, the transfer of the aging provisions to the new insurer when changing provider does not correspond to the actuarially correct amount (namely the individual prospective amount), so that competition for existing customers is still hampered.

4. Finally, not even the competition for new customers is fair, since insurance companies do not commit to a certain amount of the aging provisions and thus the premium level loses its character as a signal of efficiency, because a low premium can, in addition to high efficiency, also a tight calculation of aging provisions and thus mean high premium increases in the future.

It is therefore worth asking whether capital formation within the financing system for health services really serves sustainability or whether there are equivalent alternatives to it.

The goals that are usually cited as arguments for funding (especially the relief of the numerically weaker future generations) can certainly also be achieved in the pay-as-you-go system, provided that the extent of intergenerational transfers is not increased beyond the status quo. For this purpose, age-differentiated contributions would have to be levied in the statutory health insurance for a transitional period.5 However, if the contributions to health insurance increase with age, it is necessary that the individual insured accumulates savings in younger years in order not to have to drastically reduce his other consumption later . It may be necessary for the state to introduce some kind of compulsory savings (a "Riester obligation"), whereby the resulting benefits would partly be earmarked as a result of the compulsory insurance.

How do you get a citizen insurance?

If one accepts the premise that the aim is to include the entire population in the GKV, a number of questions arise when it is implemented: Should this regulation only apply to newly insured persons or also to those who are now insured in the private health insurance? And how are the legal claims of private insurance companies to be allowed to continue to operate?

The illegal way: Citizens' insurance by law

If the legislature were to extend the compulsory membership in the statutory health insurance system from a certain date onwards to all persons entering the labor market, but otherwise grant everyone who is already privately insured the lifelong exemption from membership in the statutory health insurance system, it would take almost another human life. until the desired status of statutory health insurance membership for the entire resident population has been achieved. This is unlikely to be seen as the desirable transition process by many supporters of citizens' insurance.

In addition, the question arises whether a corresponding law would be constitutional at all. The private health insurance companies argue that the inclusion of further or even all population groups in the GKV violates Article 12 of the Basic Law (freedom of professional practice), since it would deprive them of the opportunity to be economically active. In principle, the legislature could counter this objection by opening the GKV market for private insurance companies - of course under the terms of the GKV with regard to the catalog of benefits, collection of contributions and risk structure compensation. It is questionable, however, whether the private health insurance companies got involved in this "compensation business", since they are inexperienced in contract business with the service providers and therefore threaten to drown in the competition.

The legal way: Citizens' insurance through a flat rate per capita

However, there is a second, more elegant and undoubtedly constitutional way of achieving citizens' insurance in Germany, and that would be - the SPD and the Greens are reluctant to hear this - the conversion of employee contributions in the statutory health insurance to fund-specific flat-rate fees. Associated with this would be a shift in the redistribution of (working) income from statutory health insurance, which is still practiced today, to the tax and transfer system, for example through the following adjustment of the income tax rate, which ensures that no statutory health insurance insured person will be worse off as a result of the transition:

  • Increase in the basic security by the minimum cash contribution, 6
  • Introduction of a tax credit in the amount of the minimum cash contribution per adult (if this exceeds the tax liability, the tax office pays the difference to the household),
  • Increase in the marginal tax rate up to the old income threshold by the current employee contribution (8.2%) minus the tax advantage on it,
  • Smoothing the tax rate above this income.

Sufficient has been said elsewhere about the advantages of such a contribution survey, which is no longer linked to earned income.7 In this context, the incentives for people with higher incomes to switch to private health insurance are particularly relevant, and they would be weakened in the long term. Because they would no longer have to pay the contribution rate on the income threshold, which currently amounts to around 313 euros per month, but only the employee flat-rate flat rate for employees of around 120 to 130 euros. In addition, there is - as before - the contribution-free co-insurance of children.

As a result, the new business of private health insurance would collapse drastically without the latter being able to accuse the legislature of being unconstitutional. Many private insurance companies would then try to withdraw from the health insurance business. Even such a “quiet” transition to citizens' insurance would raise a number of questions, for example what should happen to the aging provisions if a private health insurance company closes its health insurance branch or insured persons transfer en masse to statutory health insurance. However, these problems should be solvable.

  • 1 Cf. for example J. Frerich, M. Frey: Handbuch der Geschichte der Sozialpolitik in Deutschland, Vol. 1, Munich 1996, p. 102.
  • 2 Cf. M. V. Pauly, P. Danzon, P. Feldstein, J. Hoff: Responsible National Health Insurance, Washington DC 1992.
  • 3 Cf. K. Roll, T. Stargardt, J. Schreyögg: Effect of type of insurance and income on waiting time for outpatient care, in: The Geneva Papers on Risk and Insurance, forthcoming.
  • 4 See, for example, the Advisory Council on the Assessment of Overall Economic Development: Annual Report 2002/03, Item 515.
  • 5 See S. Felder, M.Kifmann: Short and long-term consequences of a citizen insurance, in: D. Cassel (Ed.): Competition and regulation in health care, health economic contributions, No. 44, Baden-Baden 2004, pp. 9-32.
  • 6 The employer's share would still be covered by the basic security provider.
  • 7 Cf. F. Breyer, W. Franz, S. Homburg, R. Schnabel, E. Wille: Reform der Sozialenicherung, Berlin et al. 2004, Chapter 5; F. Breyer: Die "Kopfpauschale" - Citizens' insurance through the back door ?, in: Die Krankenversicherung, 2010, pp. 276-279.

Reform proposals for a uniform insurance system

Jürgen Wasem, Anke Walendzik

This article first takes stock of the current system competition between statutory health insurance (GKV) and private health insurance (PKV). Subsequently, evaluation criteria for a reorganization of the health insurance market will be developed and reform proposals will be discussed from this perspective. The article closes with the presentation of its own reform proposal.

Ambivalent findings on system competition

Those with voluntary statutory health insurance can switch to private health insurance. This has resulted in a system competition between the two insurance systems, which is considered controversial. On the one hand, advantages are ascribed to it: Each type of insurance can learn from the other which instruments work and which do not. In addition, system competition would secure innovations. In addition, against the background of systemic competition, politicians have so far waived stronger rationing in the statutory health insurance system, which partially explains the lavish statutory health insurance service catalog in an international comparison.

On the other hand, from a social perspective, the distributive and fiscal effects of system competition are to be assessed negatively due to the different calculation systems: There is a tendency for those voluntarily insured to switch to private health insurance who would be "attractive risks" for the statutory health insurance (namely: healthy, young, not family insured), while those who are less attractive to the GKV (namely: sick, older, with family insured), there is a significantly higher probability of remaining in the GKV. The exercise of voting decisions therefore results in inconsistencies in distribution policy.

In contrast, the higher performance fees for those insured with private health insurance are cited. Private patients pay more than double the statutory health insurance reimbursement for the same services at the doctor's. It is sometimes argued that the higher PKV fees make the services possible in the first place, because this is the only way to invest in equipment. This is counteracted by the preferred treatment of private patients - the fact that doctors' appointments differentiate between those with statutory and private insurance is now known in the vernacular and has also been proven experimentally. On the other hand, it is found that the private health insurance benefits from the management of health care by the statutory health insurance. The most recent example are the regulations of the pharmaceutical market reform of 2010 (the so-called AMNOG); thereafter, discounts that the top health insurance association negotiates for the manufacturers of new drugs are transferred directly to the private health insurance.

Overall, it can be stated that there are arguments both for and against system competition. In other words, the world is not black or white. From our point of view, the distribution policy deficits of the status quo predominate.

Assessment criteria for reform

When assessing the status quo and possible changes, the following aspects are particularly relevant:

  • Financial productivity and sustainability: The statutory health insurance system suffers from a systematic weakness in income. The revenue base must be stabilized in the event of a reform. At the same time, it must be asked to what extent the reform could make a contribution to improving intergenerational equity and to maintaining demographic stability.
  • Labor market effects: A reform should have positive effects on both labor demand (ancillary wage costs) and labor supply (tax burden on private households), but at least it should not bring additional burdens. However, the expected effect on the labor market should not be overestimated.
  • Distributive justice: The German health insurance system has so far shown inconsistencies in distribution policy - not only (as described above) at the interface between statutory health insurance and private health insurance, but also within statutory health insurance. In addition to the design, the reliability of distribution policy arrangements must be addressed.
  • Improved allocation of funds through functional competition in the health insurance system: As described above, today's system competition between GKV and PKV shows dysfunctionalities and therefore does not develop its full allocative functions. In the present reform proposals, it must therefore be considered whether the reform could achieve a greater functionality of competition (also within GKV and PKV).

Models for a unified insurance system

Various models of a uniform insurance system have been developed over the past ten years. Three of these models will first be briefly described and then briefly examined with regard to their effects.

Citizen Insurance

The central elements of citizens' insurance, as favored by the SPD, Alliance 90 / Greens and DGB, include: 1

  • Compulsory insurance for all citizens,
  • optional insurance in statutory health insurance or private health insurance with mandatory contracting and non-discrimination for insurers,
  • income-related contributions,
  • Extension of the contribution assessment basis,
  • Pay-as-you-go system,
  • Risk structure compensation,
  • Receipt of a dynamic employer contribution,
  • Preservation of the diversity of carriers,
  • Contract competition.

The inclusion of today's private health insured persons and the broadening of the income subject to contributions would counteract the erosion of the income base of the statutory health insurance and enable, to a limited extent, a permanently lower contribution rate, all things being equal. There would only be a small amount of decoupling from the economy. The long-term implicit reduction in the funded element in the German health insurance system - due to the expiry of a fully funded private health insurance system - can be rated as disadvantageous in terms of intergenerational equity and demographic resistance; The dependency of financing on the capital markets in private health insurance would, however, be reduced.

Changes in corporate labor demand are likely to vary depending on the sector and company. By maintaining the equal financing, there is a short-term decrease in the marginal tax burden for employers and employees as a result of the falling contribution rate. However, since increases in contribution rates are to be expected due to the demographic development, the costs for employers and the employees' disincentives to work would not actually decrease in the medium term from a dynamic perspective.

The vertical and horizontal fairness of distribution is improved because the private health insurance policyholders are included; when the contribution assessment bases are broadened, the effect depends on the details. In terms of distribution policy, the expectation is often expressed that “two-tier medicine” could be eliminated by including those insured with private health insurance. Overall, this seems somewhat shortened, since people who are willing to buy more extensive health care cannot be prevented from doing so in free societies.2 What is correct, however, is that the option for the entitled groups of people, preferential treatment, is often compared with at the same time To receive lower contributions to the GKV would be eliminated.

Citizens' insurance does not necessarily have to be a "universal insurance". As stated, the models assume that private health insurers are also allowed to act as insurance carriers. If a majority of the private health insurance companies and at the same time the health insurers offer insurance protection in this model, competition could therefore also succeed in such a system and possibly even be more intense, in any case less distorted, than it is today.

Citizen private insurance

The central elements of a citizen's private insurance, as described, among others, by Johann Eekhoff or in a motion for a resolution of the FDP in 2009, 3 include:

  • Insurance obligation for all citizens,
  • Insurance in a private health insurance, conversion of the previously existing statutory health insurance funds into private insurance associations for mutuality (VVaG),
  • Compulsory contract and prohibition of discrimination for insurers,
  • non-income-related flat-rate contributions,
  • Funding procedure with portability of the aging provisions,
  • Abolition of the employer's contribution to health insurance and (taxable) payments to employees,
  • Contract competition between private health insurance companies,
  • Social compensation for low wage earners through taxes.

With regard to the sustainability and productivity of the financing, it can be stated that the switch to flat-rate premiums would counteract the erosion of income in the statutory health insurance system. There would be a decoupling from the economic development. The expansion of the funded element would improve the demographic resistance of the financing and also the equity between the generations, but it would be linked more closely to the imponderables on the capital markets.

In the labor market, the abolition and payment of the employer's contribution would dynamically relieve the wage (additional) costs. In the case of private households, the switch to a flat-rate premium would eliminate the “disincentives to work” of today's contribution rates. However, new “disincentives to work” would arise for recipients of the necessary social compensation payments. The removal of the employer from the responsibility for the financing of the health care costs leads to a decreasing interest of the politicians in a curbing of expenditure in the health care system - a circumstance which can be assessed ambivalently.

As with the citizens 'insurance proposal, private citizens' insurance would also eliminate the distribution policy deficits of today's options between statutory health insurance and private health insurance for voluntarily insured persons. Also within the group of GKV insured persons, a model in which income redistribution is taken out of the SHI and shifted to the tax system would theoretically be superior to the social compensation immanent in the GKV. However, the question arises as to the stability of social equalization via taxes compared to the current model with income-related contributions. The less reliable the social compensation would be, the more redistributions would be left to the disadvantage of the low-wage earners compared to the status quo. The expansion of funding would make a contribution to intergenerational justice. However, the "introductory generation" would be doubly burdened under certain circumstances - and the risks of capital coverage, which the financial market crisis has made clear, would have to be accepted.

The uniform legal form envisaged for private insurance for all insurers would promote competition. Even between today's private health insurance companies, competition would become more intense because of the portable aging provisions that are envisaged. Also - depending on the design of the reform proposal, particularly with regard to the transfer of aging provisions - the incentive for health insurers to do good preventive work could be higher than in the status quo.

Some models of citizen private insurance want to dispense with a one-period risk structure compensation between the insurance companies and adjust the portable aging provisions accordingly. We doubt that the lifelong risk structure compensation implicit in this way will work and fear that, as a result, these models will retain considerable incentives for insurers to select risks, which would impair the ability of the competition to function properly.

Flat-rate premium model in GKV and PKV

Among other things, the model of the Council of Economic Experts for assessing macroeconomic development provides for a health insurance system in which GKV and PKV continue to exist, but in future both will charge flat-rate premiums in a standardized health insurance model instead of the current income-related contributions.4

  • Insurance obligation for all citizens,
  • Choice between GKV and PKV,
  • Compulsory contract and prohibition of discrimination for insurers,
  • Income and risk-independent flat-rate contributions,
  • Pay-as-you-go system,
  • expenditure risk-related risk structure compensation,
  • Abolition of the employer's contribution to health insurance and (taxable) payments to employees,
  • Contract competition between insurers,
  • Social equalization through taxes.

The advantages of decoupling income from income and the economy also apply here when considering the sustainability and productivity of financing. In contrast to the models of citizen private insurance and in accordance with the models of citizen insurance, a transition to capital coverage would be dispensed with or this would be omitted (after a transition period) for full insurance also for today's private health insurance - this can (as described above ) be assessed negatively with regard to intergenerational equity and demographic resistance and positively with regard to the existing dependencies of the financing of private health insurance on the capital markets.

The arguments already stated above for private citizens' insurance apply to the effects on labor supply and demand. The considerations for citizen private insurance also apply analogously to horizontal and vertical distributive justice.

If one considers the effects of this reform proposal on health insurance competition, it can be stated that the elimination of individual optimization at the GKV / PKV interface would promote the functionality of the competition. Competition between private health insurers would also be improved compared to today - when it is impaired due to the inadequate structure of the portability of the aging provisions.

Authors' preference model: Dutch model

In the Netherlands, the legislature introduced a uniform insurance system for full health insurance in 2006, 5 after a dual insurance system had also existed there until then. In our opinion, it has a number of attractive properties: there is an obligation to insure all citizens and an obligation to contract and a ban on discrimination for insurers. The previous GKVs have been converted into insurance associations and the insured can choose between the previous GKVs and PKVs. Financing is based on a pay-as-you-go system using a mixed system of income-related contributions and flat-rate contributions - in fact the German additional contribution model, whereby the additional contributions finance around 50% of the expenses of the compulsory insurance, i.e. the health fund only has a coverage rate of 50%. For recipients of low incomes there is a social compensation for the additional contributions, as it is already applied in the GKV today. The system is designed to be competitive.

A transfer of the Dutch insurance system is a well-founded further development of the current GKV model into a uniform insurance system. It eliminates the distribution policy deficits of today's duality and balances the disadvantages of income-related contributions and per capita lump sums. It is designed as a competitive system in which health insurers can provide care for their insured persons through selective contracts. A technically mature, morbidity-oriented risk structure compensation ensures that the health insurance companies address questions of care because chronically ill insured persons are not per se “bad risks”.

  • 1 Cf. Bündnis 90 / Die Grünen: Resolution: Efficient - Solidarity - Modern: The Green Citizens 'Insurance, 23rd Ordinary Federal Delegates' Conference, Kiel 2004; DGB: The solidarity citizen insurance, Berlin 2004; Project group citizen insurance of the SPD party executive committee: Model of a solidarity citizen insurance, Berlin 2004.
  • 2 A distinction must be made between this and whether, with a uniform insurance system, it should also be permissible for the patient to pay the doctor higher remuneration for the same service in order to obtain preferential status.
  • 3 Cf. J. Eekhoff, V. Bünnagel, S. Kochskämper, K. Menzel: Citizen Private Insurance - A New Way for Health Care, Tübingen 2008; FDP parliamentary group in the German Bundestag: Application: For a simple, transparent and performance-based health system, BT-Drucksache 16/11879, Berlin 2009.
  • 4 Advisory Council for the Assessment of Macroeconomic Development: Successes Abroad - Domestic Challenges, Wiesbaden 2004.
  • 5 Cf. S. Greß, M. Manouguian, J. Wasem: Health Insurance Reform in the Netherlands, in: CESifo DICE Report, 5th year (2007), no. 1, pp. 63-67.

On the way to health cooperatives?

Klaus-Dirk Henke

Cooperatives as a new legal form under private law should be in the foreground at this point and with them the discussion about certain forms of privatization or denationalisation of statutory health insurance. There are already associations of service providers to bundle economic interests on the procurement market (purchasing cooperatives); they develop in competition just like the cooperatives of service providers, e.g. the resident urologists or cardiologists.1 In 2007 there were around 100 cooperatives that were active in one form or another in the health care system in Germany

Although the registered cooperative and the mutual insurance association hardly differ in their activities, 3 in Germany the cooperative is not permitted as a legal form for private and statutory health insurance (cf. § 7 I Insurance Supervision Act - VAG). The current statutory health insurance (GKV) cannot rethink itself, a view that is controversial among lawyers in view of Section 1 (2) VAG. The only thing that has been realized in the first steps is that an existing GKV cooperates with a company under private law in order to open up the second health market. However, it only includes those health-related services that are not reimbursable in the statutory health insurance and that must therefore be provided from private consumer spending. A purchasing cooperative or a cooperative as an information platform in the second health market is basically conceivable, even if in the specific case the “Gesundheitswelt Direkt” was founded as a GmbH and independently of the Deutsche BKK company health insurance fund

On the way to insurance co-operatives

If one turns to the possibility of an insurance cooperative, the first steps are initially conceivable at regional or cantonal level and, as has already been implemented in Switzerland, for example. 5 So far, there has only been cooperative coverage of health risks in Japan. The Dutch health system with the privatization of statutory health insurance could become a model for transforming statutory health insurance into private-law cooperatives or mutual insurance associations with the aim of overcoming the existing duality of statutory health insurance and private health insurance and, through the integration of both markets, competition in the insurance market within to intensify a new framework. 6

Against the background of judgments of the Federal Constitutional Court, constitutional protection of the statutory health insurance system is occasionally cited.7 It should be seen in the context of the closeness of statutory health insurance to the cooperative characteristics of self-help, self-responsibility and self-administration. Protection would consolidate a statutory health insurance system that has grown mainly out of path dependencies, the origin of which lies in Bismarck’s legislation from 1883 and where the question can be asked whether it is still expedient today in its public law form.

In addition to a legal perspective, it is also helpful to take a look at the historical development of statutory health insurance. Health insurance funds have developed from cooperative self-help institutions.8 The first substitute funds existed as voluntary auxiliary funds even before the introduction of the statutory health insurance. And today the existing miners' union shows quite cooperative features. 9

In favor of the cooperative as a new form of health insurance to overcome the duality of GKV and PKV, the fact that the “purposeful response of the socially conservative Protestant government to the increasing politicization and organization of the working class, perceived as a threat” 10 at the time of Bismarck was an attempt with the social security legislation to constitute cooperative bodies.

Corporations under public law, e.g.

  • through joint protection in the event of illness of the members (cooperative funding mandate),
  • by not striving for profits (non-profit organization) and thus
  • through membership fees to help people help themselves,
  • through the personal responsibility of the management (self-administration),
  • through the democratic element (social elections),
  • through the identity of sponsors (members) and service recipients,
  • through the solidarity element of the income dependency of the contributions, the non-graduation of the contributions according to the individual risk as well as the free co-insurance of relatives. 11

The compulsory membership and the associated lack of voluntariness in the statutory health insurance scheme has lost its justification as a (counter) argument for a rather untypical character of the statutory health insurance scheme12. The current opportunities to switch between the individual health insurance companies and the increasing competition for better forms of care are impressive proof of this. The democratic element in the statutory health insurance system is only insufficiently effective when you consider that in the statutory health insurance system, people often don't actually vote. In the case of social elections, there is usually only one proposal list and there are often fewer people on the lists than members have to be elected. These so-called peace elections are now the norm. 13

Ultimately, the common and uniform requirements of the Federal Joint Committee for determining the catalog of benefits to which all insured persons of the GKV are subject are opposed to democratic and thus cooperative and therefore competitive principles. The insured persons of the GKV, who can no longer benefit from it if a therapy is excluded by the Federal Joint Committee, then no longer have the choice of looking for a fund within the GKV that reimburses this therapy, since the guidelines are common and uniform for all health insurances of the GKV apply. Because of their compulsory membership, they have no option to switch to private health insurance. 14