Public health insurers face potential cash crunch in 2009

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29 Dec, 2008 Updated Mon 29 Dec 2008 14:26 CEST
Public health insurers face potential cash crunch in 2009

Germany’s public health care system could come up short of cash in 2009. If the economy tanks, the new universal premium set by the government might not be enough, Health Minister Ulla Schmidt said on Monday.


Schmidt, in an interview on German public broadcaster ZDF, said she could not say for certain if the government’s new common health premium, currently set at 15.5 percent of the insured’s gross pay, would stay at that rate next year.

Doubts over the financing of the German statutory health care system are being made public just days before reforms to the system go into effect.

If the German economy shrinks by two percent in 2009, as many economists are predicting, that would lead to a loss of €440 million for the government’s new so-called health fund, the pool of money from which the insurers in the future will receive a basic sum to cover their customers. If the 15.5 percent premium rate planned for next year leads to financing shortfalls at health insurers, they would have to ask their members to make up the difference.

The government will first decide next autumn if the common health premium should be raised, Schmidt said.

The universal health premium is part of a broader health care reform package by the government. The amount of money each insurer receives from the health fund will now depend on its members. Those insurers with more chronically ill people, for example, will get more money.

The reform will take contributions from a current average of 14.92 percent of gross pay to 15.5 percent. Health insurance contributions are generally borne roughly equally by salaried workers and their employers in Germany.

In the interview on Monday, Schmidt pointed out that one of the elements of a second economic stimulus plan under discussion is a tax subsidy for the new heath fund. If agreed on, it could bring down insurance rates. But the details of the stimulus plan are set to be unveiled in January.

Herbert Reichelt, the future head of Germany’s biggest public insurer AOK, said he does not believe the common health contribution rate will not be high enough for all of Germany’s public insurers. He predicts a shortfall of between €700 million and €1 billion. While his company, AOK, will stay above water with the 15.5 percent premium rate, he believes others will likely have to ask their members to cough up some extra cash.


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