Private health insurance – what really matters?

PM Dr. Johannes Fiala, Munich, November 2006

In a time in which the market for private health insurance – but not only this – is “shaped” on the part of the mediators in the majority of cases by people with manageable specialist knowledge, elementary product contents are obviously completely forgotten.

The focus is on advertising claims along the lines of “Is their health insurance too expensive, too?”

For the expert, it is hard to believe that a largely disoriented tariff rate has been able to establish itself in the market, especially in the most comprehensive, consultation-intensive and responsible insurance line.

Qualification is less in demand in many places, certainly not if you have to provide or even pay for it yourself. People prefer to rely on the product designers (also known as insurers or risk carriers), who will take care of everything if something goes wrong.

So no one is surprised any more when health insurers design their products according to sales wishes, sales platforms with the help of software programs offer 20 “comparable” full medical cost tariffs at the click of a mouse and brokers discuss among themselves on the Internet who insures newborns alone with maximum commission. This gives the broad market the impression that it is only a question of remuneration, the rapid acceptance of new business or the sympathy value of the broker advisor as to which health insurer one works with. Decisions made on such a basis will have fatal consequences for customers and intermediaries. To a qualified evaluation of offerers and products belong, so Claus Dieter Gorr, analyst and insurance broker (claus-dieter.gorr@premiumcircle.de) in the private health insurance in principle the following criteria:

• Corporate culture
• Financial strength
• Collective composition
• Distribution channels
• Application questions/risk assessment
• Performance Management
• Rate structure

And most importantly those:

• Terms of contract

All these points are important at the time of application and should be considered in a networked way when making decisions, as only they allow a rounded picture of how a company is positioned overall. Ultimately, however, these are only snapshots, some of which could already be obsolete in the following year, for example due to a change in corporate policy. The affected customer, on the other hand, buys the terms of the contract and presumably has them for life, often without significant change. And that has consequences – for customers and brokers alike. For the customer who is confronted at some point with the fact that his health insurer adheres solely to the General Conditions of Insurance (GCI) when it comes to questions of benefits. For the broker, who at some point has to explain why he gave his client what advice and how many qualified alternatives he actually examined and offered in detail before closing. In the customer’s memory, the price (which is also only ever a snapshot!) will by no means have been more important than the then obvious performance deficits. The times in which companies evaluated themselves with more or less product-neutral “satisfaction parameters” and were able to bask in the light of publicity will certainly be over in the near future. Consumers who think and make decisions for the long term are increasingly realising that they cannot attach any lasting significance to the – unenforceable – assertions of insurers that “we actually provide more than the insurance conditions allow”. Paragraph 1 of the Model Conditions for Medical Expenses Insurance of 1994 (MBKK 94) is clear on this point: the insurer provides insurance cover for illnesses, accidents and other events specified in the contract. In the event of an insured event, it grants: a) in the case of medical expenses insurance, reimbursement of expenses for medical treatment and other agreed benefits.

Meaning:

The medically necessary service of the doctor is insured, the rest is regulated by the individual tariff conditions. In other words: where, when, for how long and in what concrete form. So if one generally assumes that private health insurance is to be taken out only once in a lifetime and as a long-term strategic decision, then there are always other considerations to be made. For example, in the wake of globalization, hardly anyone today can predict where they will be in the short or long term, either privately or professionally. Today, no one can foresee their future professional status (employed or self-employed) with any certainty and thus takes an incalculable risk in some of the deficient benefits catalogues of many tariffs. In the context of the massive migration of medical capacities from Germany in the meantime, no one can foresee today where and in which country the medical capacities that will then be able to provide the required medical care will practice later. For such cases, there are a variety of benefits provided: Guaranteed arrangements at the beginning of the contract, option programs, exclusions or often no offer of some providers. This applies to the same extent to all other service areas affected by medical progress, such as the catalogues of aids, dental and therapeutic products or the complex area of preventive services. Also the question about benefits for follow-up treatments, rehabilitation measures or reimbursable hospitals, hospices, sanatoriums or mixed institutions is answered absolutely differently by the insurers. So there are numerous points are to be considered when taking out private health insurance. Consumers are well advised to question the advertising slogans of intermediaries and to seek advice from a qualified insurance broker. The consultation should be documented in writing.

by Dr. Johannes Fiala

by courtesy of

www. Channelpartner.de (Article from 13.11.2006)

http://www.channelpartner.de/knowledgecenter/finanzen/235945/index1.html

and

www.competence-site.de

and

www.channelpartner.de. (published on 02.10.2006)

and

www.channelpartner.de (published 2005-12-05)

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About the author

Dr. Johannes Fiala
PhD, MBA, MM

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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