PKV offers no guarantee of better rates
The PKV is raging against the possibility for the GKV to offer optional tariffs, which was introduced a few years ago by the law to strengthen competition. They are not demographic because of the lack of ageing provisions, the premiums increase with age to an unaffordable level, they can be cancelled by the SHI, there is no risk assessment, the optional tariffs are a field of private health insurance and have no place in the SHI for reasons of competition and finally the SHI does not know how to calculate correctly. On closer inspection, none of these allegations hold water. Whether the federal government will nevertheless restrict the elective tariffs will soon be decided .
Supplementary insurance was completely deregulated in 1994
With the European deregulation in 1994 in non-life insurance, there are no longer any calculation regulations for supplementary insurance in private health insurance. This also renders approval by the supervisory authority obsolete. A life insurance-type calculation with ageing provisions is no longer mandatory. Tariffs without ageing provisions – in which premiums rise in line with the age-related risk – have since become common and are becoming increasingly widespread. They are therefore not worse than with an ageing provision – but the more suitable offer for many policyholders. This is because an ageing provision cannot effectively prevent a premium increase in old age either, so that the premium that is more favourable in younger years without an ageing provision appears to be the more suitable offer for many – there is freedom of choice in the market. The customer can choose, and there is no reason – and also no legal basis in EU law – to restrict this freedom of choice within private health insurance. Since the subprime crisis, many policyholders have been aware that insurers’ CFOs are also capable of literally burning through large amounts of money: In the case of tariffs without age reserves, it is up to the customer to invest the corresponding reserves himself.
Household insurers may also offer supplementary health tariffs
The separation of lines in non-life insurance – which includes health insurance – was abolished in 1994. Since then, every property insurer has also been allowed to offer supplementary tariffs for health insurance, with or without ageing provisions. If you want, you can insure with the same insurer as your horse, even if not at the same rate and taking the same horse treatment from the veterinarian. The actuarial knowledge for their calculation is not a monopoly of private health insurance – non-life insurers, as well as statutory health insurance companies, can also have it. Whoever wants to deny this to the GKV must also be able to explain why a motor vehicle insurer should be allowed to offer supplementary insurance. Making the differences between competing optional tariffs transparent is a task for qualified insurance brokers: this always requires an analysis of the small print.
Lack of risk assessment speaks in favour of GKV optional tariffs
Under no circumstances is a risk assessment required by law in private health insurance. Where it is – mostly – practised, this is for competitive reasons, because premiums would be higher without underwriting. However, there is not only a waiver of risk assessment in the GKV elective tariffs, but also in the tariffs of some PKV companies – nevertheless, these tariffs can be calculated just as risk-adjusted. However, it is to be feared that many insured persons who currently have the option of SHI elective tariffs will no longer be able to find suitable supplementary insurances to the SHI if they are banned for risk reasons. Freedom of choice would thus be restricted without any real advantage. Because the choice to insure themselves in the additional tariffs of the private health insurance, healthy people have today already. If private health insurance has better competitive arguments for the customers concerned, this market is open to it. If, on the other hand, it cannot stand the competition from SHI, how can it stand up to competitors from private health insurance, property insurers or foreign insurers who are even allowed to design their tariffs according to almost the same principles as SHI, if they wanted to?
Ordinary right of termination in private health insurance not excluded
In supplementary insurance policies, the private health insurer can terminate the policy without giving reasons during the first three years, unless he voluntarily excludes this right by contract. If the supplementary insurance is calculated without an ageing reserve, it can even be limited in time from the outset and, in addition, as in GKV optional tariffs, exclude cancellation by the insured person for three years. In addition, he can even terminate a group insurance policy in its entirety, but must then grant the insured the right to continue the policy in a then – possibly – open individual insurance tariff. This is also comparable in the GKV – here, however, every member has the right to join an open optional tariff without any risk assessment. In this case, however, benefits are paid even after the waiting period for insured events that have already occurred, which would be permanently excluded in private health insurance.
SHI elective tariffs are subject to approval under supervisory law
All SHI elective tariffs must be submitted to the competent supervisory authority for approval with evidence of their adequate calculation and long-term viability. The latter checks the calculation beforehand and only approves the tariff if all the conditions are met. The calculation is made on the basis of suitable statistics and with the advice of qualified actuaries and other experts – who are not only to be found among those employed in private health insurance. The elective tariffs are then monitored annually for their continued viability and adjusted if necessary. As in the PKV also, it can come in individual cases to the closure of such tariffs – then the insured person has however the right to change into other choice tariffs open for him (naturally without risk examination). In private health insurance, too, for example, permissible temporary supplementary tariffs or group insurance for existing contracts can simply be terminated for the intended closure by giving notice. And a property insurer, for example, does not even have to calculate its supplementary health tariffs without ageing provisions in line with the risks, in contrast to statutory health insurance – fighting premiums as in the motor vehicle business would be permissible.
Freedom of choice and market is restricted to the detriment of customers
With the GKV-optional tariffs there is an increasingly broader offer for everyone insured in the GKV, in addition to the possibilities for healthy people to insure themselves in the most different additional tariffs in the private health insurance or from property insurers supplementary to the GKV. It is possible for private health insurers or property insurers to offer such tariffs according to almost the same criteria as those used in statutory health insurance. There is no restriction for PKV here. The assertion that private health insurance must necessarily adhere to different standards for its supplementary tariffs than statutory health insurance is simply wrong. If many private health insurance companies calculate tariffs for an unlimited period of time and with ageing provisions as well as with risk assessment, this is their own wish in order to position themselves in competition. But to sell this as a systematic advantage of private health insurance, which is to be preserved by eliminating competition from statutory health insurance for the benefit of the customer, is to be unmasked on closer inspection as pure lobbying.
by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm
by courtesy of
www.juraforum.de (published on 23.09.2010)
www.dzw-online.de (published in Die ZahnarztWoche 40/2010, page 23)
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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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