New rules and pitfalls for private health insurance policyholders

�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 switching insurance This year, professional organisations announced that the outlook for the private health insurance (PHI) sector was stable. However, experts believe that a shakeout in the private health insurance industry is 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 switch 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 the effect of a loss – as an unnecessarily high insurance premium. Insurers and insurance brokers are often equally liable for such damages. Existence danger for private health insurers The danger for the insurers of private health insurers results from the fact that the insured persons can take their age reserves (at the level of the basic tariff) with them – money should then actually flow here. Some private health insurers have already indicated that they will be well prepared in the first half of 2009 and will be on the hunt 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, must now bear the entire overhead costs with his remaining insureds – in fact, he might as well give up and join Medicator – if no one else wants him. If rating companies (specialist organisations) and insurance brokers are unable to provide an answer 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 brokerage. 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 its 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 is then at least three months in the future, for example 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 tariffs in order to be part of the reinsurance business. Insurance broker liability due to gaps in the 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 self-employed persons and tradesmen, there is the possibility of 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, sales and training manager 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 intermediaries 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 transferred Only for new insureds may the ageing provisions be transferred permanently. 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.
Sachverständigenbüro Peter A. Schramm, graduate mathematician, actuary DAV, expert for actuarial mathematics, publicly appointed and sworn by the IHK Frankfurt am Main for actuarial mathematics in private health insurance
Dr. Johannes Fiala, MBA Financial Services (Univ.Wales), MM (Univ.), Bankkaufmann (IHK), Certified Financial and Investment Advisor (A.F.A.), Lecturer for Civil Law and Insurance Law (Univ. of Cooperative Education)
(Deutschegetränkewirtschaft June+July2007, 62)

Our office in Munich

You will find our office at Fasolt-Strasse 7 in Munich, very close to Schloss Nymphenburg. Our team consists of highly motivated attorneys who are available for all the needs of our clients. In special cases, our law firm cooperates with selected experts to represent your interests in the best possible way.

About the author

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.
»More about Dr. Johannes Fiala

On these pages, Dr. Fiala provides information on current legal and economic topics as well as on current political changes that are of social and/or corporate relevance.

Arrange your personal appointment with us.

Make an appointment / call back service

You are already receiving legal advice and would like a second opinion? In this case please contact Dr. Fiala directly via the following link.

Obtain a second legal opinion

The first telephone call about your request is free of charge.