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The Future Lies in A Fixed Premium

The Future Lies in A Fixed Premium

Photo: Dr. Philipp Rösler

All is well that ends well – that’s the old adage. If this proves to be true as well for the health care policy of the Conservative-Liberal coalition has yet to be seen. There has been a long struggle between Union and FDP representatives on exactly how to move forward in health policy matters. At the heart of the matter is the financial reform of the national health insurance system.

At the same time, the health care system is supposed to become more just for the insured, at least that’s the idea. But it is still controversial if this is going to be the case. The reason for this: The federal Ministry of Health (BMG) is planning a fixed premium for all insured within the national health system, which is “not to be related to their incomes”.

Until the agenda is being set, everything remains the same: this year there will neither be any changes in the health fond nor in the health insurance rate of 14.9 per cent for every person in the national health system. The split of this rate will also remain the same for the time being: seven percent of the gross income is being paid by the employer, the other 7.9 per cent by the employee.

Reform not before 2011

Starting 2011, the process will get started. There will be certain changes for employees, employers and the national health insurance. If the coalition gets its way, the national health insurance is supposed to get more autonomy in determining their premiums and thus create more competition. This is one of the reasons that the fixed premium per person is to be introduced.

Experts estimate that the premium will be 150 Euros per person. In the beginning, people with a lower income will probably pay more than they do today. To prevent overburdening them by introducing this new program, they will in turn benefit from a social compensation plan which is going to be funded by taxes paid by everyone. That is, at least for now, the plan of Federal Minister of Health Philipp Roesler to make sure there is more justice between the rich and the poor. If he is going to be successful remains to be seen.

Government committee to clarify details

At the moment, there is neither any consensus on which income level will be the threshold for this compensation plan nor where the money to be raised by taxes is going to come from. “Details will be clarified by a government committee”, said a speaker of the BMG. There is speculation that this committee is going to be summoned by Roesler this month.

On the other hand, the employers have reason to rejoice: the coalition plans to freeze their rate at seven percent. The reason: the mounting health care costs shall be separated from the additional wage costs to ensure jobs in the long run.

A fixed amount for the employers and a flexible amount for the employees will almost certainly mean that the mounting costs in health services – for example due to modern medicine or a higher life expectancy - will have to be covered by employees alone even more. This will also be true for the additional premium that some health insurance providers plan to introduce within the next few months. Right now, the ones paying for this premium are the employees as well.

Changes in office charge also possible

Photo: German nsurance card 
Some points will change in the
German healthcare system;
© Claudia Hautumm/

Family members will probably keep their non-contributory status. At least, there are “good reasons for this”, said the speaker of the BMG. Details in this matter are supposed to be discussed by the committee as well as the still open questions regarding the introduction of an electronic health card and doctors’ charges.

There could also be possible changes in the office charge. A recently published study by Germany’s biggest health insurance provider, Barmer GEK, showed that Germans on average went to see their doctors 18 times per year. The goal of the office charge to reduce the number of doctor’s visits has obviously not been reached. It is still not clear what a new regulation should look like. Whether the “entry fee” for the doctor’s office will become cheaper in the future but will instead be charged for every visit is still to be seen.

Also to be seen is if there will be a growing number of young, healthy and higher income people that will change into a private health insurance plan. Because, according to plans of the Conservative-Liberal government, that change should become easier in the future and already possible after hitting the income threshold of 49,950.00 Euros per year just once. Up to now, the rule was that people under the national insurance plan could only change into the private sector if they were able to prove that income for three consecutive years.

So, the conservative-liberal government has a lot on its plate. We can all anticipate the results and their implementations by the government committee within the next few years.

Simone Heimann

- Per Capita Premium: "Top Earners Will Not Necessarily Get to Pay Less" - Interview with health economist Thomas Drabinski of 1 February 2010


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Excerpt of the coalition contract of CDU, CSU and FDP, Page 78

“In the long run the current compensation system is going to be converted into a system that provides better autonomy for premiums, regional diversification and for employee premiums that will not be tied to income levels and which will be compensated for by social measures. Because we want to achieve an extensive separation of health care costs and the additional wage costs, we keep the employer’s share fixed. At the beginning of the parliamentary term we will introduce a government committee that will propose the necessary steps for achieving this goal.”