Health reform: New rules and pitfalls for PkV-insured persons

In a few years we will know through case law what the government might have meant by its laws (Dr. Jenssen – VDVM)
Uncertainty when choosing and changing insurance
This year, professional organizations announced that the outlook for the private health insurance (PHI) industry was stable. However, experts believe that a market shakeout in the private health insurance industry is likely to be imminent. The health reform may not only make premiums considerably more expensive – it is to be feared that one or the other insurer will have to withdraw from the market.
Basic tariff as a catch-all?
Those who would like to be included in the new basic tariff can be poached – without benefit restrictions and without risk surcharges. Anyone wishing to switch from statutory health insurance to private health insurance must now be able to demonstrate an income above the assessment threshold for three years.
Cost trap when switching to private health insurance
Only those who change from one private comprehensive insurance to another in the first half of 2009 will have their ageing provision transferred from the old insurer. This means for policyholders who have a change recommended to them today that this (pro rata) ageing provision at the level of the basic tariff will not be included. The capital that is then missing with the new insurer has a damaging effect – as an unnecessarily high insurance premium. Insurers and insurance brokers are often equally liable for such damages.
Existential danger for PKV insurers
The danger for the insurers of private health insurance companies results from the fact that the insured can take their age reserves (at the level of the basic tariff) with them – this is where money is supposed to actually flow. Some PKV insurers have already indicated that they will be well prepared in the first half of 2009 and want to go hunting for all healthy people. These should then be able to be insured with their ageing provision in modern tariffs – not only in the basic tariff. And in these modern tariffs, in return, there is no equalisation in the industry between the good risks that have been switched and the bad risks that remain in the old tariffs. The compensation is in fact limited to the basic tariff. Those private health insurance companies that are among the real losers may subsequently raise their premiums substantially – not only because of rising average claims but also because of the decline in cancellations. He has had to accept cancellation losses and now has to bear the entire overhead costs with his remaining policyholders – in fact, he might as well give up and join Medictor – if no one else wants him. If rating companies (specialist organisations) and insurance brokers are unable to provide answers to the question of which companies could be affected and how, it is hardly possible to comply with the duty of care in the case of private health insurance broking. Those insureds who did not save themselves in time by changing insurers might otherwise only be left with the basic tariff with maximum premium guarantee and risk equalisation in the industry. The broker’s liability should then be safe in such cases. A strategic option may be to use the small entitlement (health) or the large entitlement (health and old age) as a broker for his clients.
Cancellations and premium increases foreseeable
Overall, a double-digit percentage increase in private health insurance premiums is expected. The changer will be oriented towards the lower premium. Insurers cannot avoid giving ordinary notice of termination in the first six months of 2009 – those who wish to do so will give ordinary notice of termination in the first six months of 2009, on the next ordinary termination date. This date is then at least three months in the future, e.g. 31.12.2009. By law, it only depends on the fact that he gave notice before 1.7.2009, not on the date on which the notice took effect. The insurance industry will offer new modern rates to be part of the reinsurance business.
Insurance broker liability due to gaps in orientation
The age reserves can also be fully credited in the event of a change of tariff with the same insurer: Here, the standard tariff can be a real alternative to the basic tariff, also because of the increasingly broader assessment basis for the statutory health insurance contributions. For the self-employed and tradesmen, there is the possibility of achieving an attractive combination of statutory pension and statutory compulsory insurance via foreign countries. Those brokers who are aware of these European rules in a globalised landscape are better placed to avoid liability for advice.
Insurer, distributor and trainer liability
Are these facts being deliberately hushed up by everyone today? The brokers and intermediaries would immediately lose their reinsurance business between PKV and PKV – until 1.1.2009. Business-minded, but unfortunately only half-informed mediators, will more or less blindly accompany a change from one private health insurer to another before 1.1.2009. And in the first half of 2009, when customers do cancel their policies, they also contribute to the loss because they take their ageing provision with them, so it is not available for imputed inheritance. And after 30.6.2009, hardly anyone from the old portfolio will change private health insurance companies, because those who wanted to do so did so in the first half of 2009 – after that, the ageing provision will no longer be included. Only in the case of new insured persons may the age-related provisions be permanently transferred. So there is also an interest on the part of private health insurers in keeping these facts quiet for as long as possible. The customer will be the first to suffer the consequences of this in the form of unnecessarily high premiums if he switches before 1.1.2009 – and shortly afterwards the intermediary or broker, who will be liable for giving incorrect advice.
Info: “§ 178 a VVG (7) The insurer is obliged… 4. to grant insurance in the basic tariff according to § 12 para. 1a of the Insurance Supervision Act to all persons with residence in Germany who have agreed a private health insurance within the meaning of para. 5 with an insurance company licensed to do business in Germany and whose contract is concluded after 31 December 2008. If the private health insurance contract within the meaning of paragraph 5 was concluded before 1 January 2009, the conclusion of a contract in the basic tariff with one’s own or another insurance undertaking, taking along the ageing provisions in accordance with section 178f(1), may only be demanded until 30 June 2009 in the event of a change or termination of the contract….”
“§ 178f VVG (1) In the case of an existing insurance relationship, the policyholder may demand that the insurer… 2. in the event of termination of the contract and simultaneous conclusion of a new contract, which may fully or partially replace the health insurance cover provided for in the statutory social security system, with another health insurer (a) transfer to the new insurer the calculated ageing reserve of the part of the insurance whose benefits correspond to the basic tariff, provided that the terminated medical expenses insurance was taken out after 1 January 2009; (b) in the case of a contract taken out under the basic tariff, transfer to the new insurer the calculated ageing reserve of the part of the insurance whose benefits correspond to the basic tariff, provided that the full medical expenses insurance terminated was taken out before 1 January 2009 and the termination took place before 1 July 2009.”
“§ 12g VAG Risk equalisation (1) Insurance undertakings offering a basic tariff must participate in the equalisation of insurance risks in the basic tariff in order to permanently fulfil the obligations arising from the insurance policies and, to this end, must create and maintain an equalisation system to which they belong. The equalisation system must ensure a permanent and effective equalisation of the different burdens. Additional expenses incurred in the basic tariff due to pre-existing conditions shall be distributed equally among all persons insured in the basic tariff; additional expenses incurred in order to ensure the limitations referred to in Section 12 (1c) shall be distributed among all participating insurance undertakings in such a way that an equal burden is placed on these undertakings. (2) The establishment, structuring, amendment and implementation of the equalisation scheme shall be subject to supervision by the Federal Financial Supervisory Authority.”
(Dt. Vertriebs- und Verkaufsanzeiger 224/2007, p.7)

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Dr. Johannes Fiala Dr. Johannes Fiala

Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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