Private health insurance: Risks when concluding and changing tariffs and insurers

– When the change into another private health insurance (PKV) fails en masse –

Around 10% of Germans have private health insurance. On average, customers change insurance companies five times in their lifetime,
if he engages in advertising through certain brokers and distributors. Massively it comes thereby later to a contestation or a
Withdrawal by the insurance company. The hanger-on for this is (allegedly) false information on health issues.


Risk of the policyholder

A recent ruling by the Stuttgart Higher Regional Court dated 19.04.2012 (Case No. 7 U 157/11) mitigates the risk at most in individual cases – and certainly not in the case of brokers.
of the policyholder to suddenly and unexpectedly find himself without insurance cover: “If, at the time the contract was concluded, a policyholder was provided with complex
health questions were read out so quickly that their correct recording was not ensured, an incomplete answer cannot form the basis of a
Challenge for fraudulent misrepresentation or a rescission of the insurance contract.”


Incorrect information on health questions is discovered by the insurer’s benefits department as soon as the policyholder requests reimbursement. D
he insurer then requests the relevant information from the attending physicians so that concealed pre-existing conditions can be discovered – even if
the policyholder was not aware of this. It is not uncommon for doctors to document illnesses in patient records for billing purposes,
about which the doctor had not discussed with the patient.

Resignation because of a single sleep disorder

Thus, the treatment of a temporary sleep disorder by “nocturnal brooding” with prescription of a supposed sleeping pill is included in the
Files on depression with prescription of psychotropic drugs and the patient to one of the dreaded psychotherapy cases, whose application the insurer
would never have accepted if the information had been truthful.


Risk from patient files

Many insurance intermediaries do not attach any importance to documenting the details of pre-existing conditions in a watertight manner, for example, by
the family doctor confirms the accuracy of the answers to the health questions on his part. The possible later contestation and withdrawal of the insurer
is factored in by insurance agents and even some brokers. The insurer is then allowed to keep the insurance premiums – demands
but nevertheless returned all the services he had rendered so far. In less blatant cases, the insurer agrees to amend the policy to
conditions. This means risk exclusions and premium surcharges, or even a change to the so-called basic tariff.


Risk of the basic tariff

The policyholder will be forced to look for another insurer in case of withdrawal – the previous insurer is not
obliged to reinstate the policyholder. The person concerned has a right to insurance cover with a new insurer
but only in the basic tariff, regularly with benefits at health insurance level at maximum premiums.


Risk of PKV in old age

Many people who have been insured with private health insurance for many years have had the experience that their private health insurance was cheap when they were young – but became expensive when they got older. This is because,
that premium increases for older people will be disproportionate to the development of the tariff as a whole, unless additional funds are provided to support and
Contribution limitation can be used. The implementation of the results of an expert commission appointed by the Bundestag in 1994 to investigate the
problem of rising private health insurance premiums in old age has achieved some improvements here. However, even if the old-age contributions only increase proportionally with the
If the development of health care costs were to increase, this would lead, for example, to a 4% increase in costs over decades, which would soon mean that in old age, every average
statutory pension development is being consumed to an ever greater extent for private health insurance contributions.


Legal way out of overpriced tariffs

In the past, a large proportion of those insured under private health insurance left before reaching retirement age and tried to switch back to statutory health insurance. Today this is very
limited to largely impossible, especially after the age of 55. In 1994, the legislature recognized that protection of the
from a premium spiral in his current tariff cannot be guaranteed, and that is precisely why a tariff change right in
cheaper new tariffs of the previous insurer installed with full inclusion of the ageing provision – today regulated in § 204 of the German Insurance Contract Act (VVG).
Practice shows that, at the latest with the help of experts, it is always possible to find tariffs that are still well above the level of the health insurance funds and that cover at least
some years will result in a significant premium saving. A halving of the premium can often even be achieved without major reductions in benefits,
after the new rates are calculated with a much healthier portfolio. Since this is regularly the only provision expressly created by the legislature
possibility of avoiding unaffordable private health insurance premiums, those who do not like to use it often cannot be helped at all.


by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm


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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.
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