Should Germany get rid of private health insurance?

Should Germany get rid of private health insurance?
Health insurance cards. Photo: DPA
There are fresh calls for reform on Germany's dual health system after a new study found many people would benefit if private health insurance was abolished.

Those with statutory health insurance – along with their employer – could save an average of €145 per year if the current dual system was abolished.

That’s according to a new study that believes the statutory health insurance scheme (GKV) would receive an extra €9 billion a year if privately insured people were included in it. 

The cash boost would allow the GKV to reduce contributions for both employers and employees, the study by the Iges Institute on behalf of the Bertelsmann Foundation found.

The findings are based on the latest data from 2016 that comes from an annual survey of around 12,000 households. In 2016 – as is currently the case – around 8.8 million people were privately insured. In 2016, the statutory system had about 70.4 million insured people.

Currently there are around 73.2 million people insured under GKV, mainly due to a surge in immigration to Germany, said Stefan Etgeton of the Bertelsmann Foundation.

According to the study, which fuels the discussion on the introduction of a so-called 'citizens' insurance', those insured in private health insurance (PKV) – mainly high-income earners, civil servants and self-employed – earn on average 56 percent more than those insured by statutory health insurance.

While statutory health insurance members have an average annual income of €24,149 per person, the figure for private health insurance members is €37,858.

Those who are privately insured also tend to be healthier. If they were covered by statutory health insurance, the study calculates this would result in an annual cash boost of €8.7 to €10.6 billion. The contribution rate could then fall by 0.6 to 0.7 percentage points for those in the system.

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Photo: DPA

If doctors were compensated for the loss of fees they would incur if there were no patients with private health insurance, the study believes contribution rates would still fall – by 0.2 to 0.3 percentage points.

In this case, GKV insured patients and their employers would still be relieved by an average of €48 per year.

Call for system overhaul

The supply of doctors would also likely shift if privately insured people were to switch to the GKV system.

The Iges Institute investigated a connection between the regional distribution of privately insured patients and the establishment of doctors' surgeries.

They found in Bavaria, for example, in areas with a large number of privately insured people, there's an above-average number of doctor practices.

A causal connection was not proven in the study. However, the authors assume that “the average two and a half times higher remuneration for medical services for private patients” strengthens the incentives for doctors to set up their practices in areas with a large number of privately insured patients.

READ ALSO: Everything you need to know about making a doctor's appointment in Germany

As a consequence of the dual system, the Bertelsmann Foundation warned of a loss of solidarity and a weakening of social cohesion.

“Every year, the average GKV insured pays more than necessary so that high-income earners, civil servants and the self-employed can escape solidarity compensation,” Etgeton said.

The foundation therefore calls for an overhaul of health and nursing care insurance. They also said it should become easier for people in Germany to switch from private to statutory health insurance.

The goal of the restructuring should be an integrated health and nursing care insurance, where all citizens are compulsorily insured. They believe contributions should be based on financial capacity, not on individual health risks.


Statutory health insurance – (die) gesetzliche Krankenversicherung (GKV)

Private health insurance – (die) private Krankenversicherung (PKV)

Citizens' insurance – (die) Bürgerversicherung

Average – durchschnittlich

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