ZEW President Franz Criticises the Fund Model for Restructuring the Statutory Health Insurance


By now, the restructuring of the statutory health insurance (SHI) has gradually taken shape as reportedly planned by the federal government. Prof. Dr. Dr. h.c. mult. Wolfgang Franz, president of the Centre for European Economic Research (ZEW), does not consider the transformation into a fund model to be a suitable reform concept for the GKV.

The model of so-called "Gesundheitsfonds" (health care funds) currently under discussion is generally supposed to work as follows: According to the information currently available, the contributions to the SHI are no longer to be directly transferred to an individual health insurance but to a fund. Each month, this fund pays out a standardised fee per member of about EUR 150 to 170 to each statutory health insurance in accordance with the average per capita costs of the insured. It is not yet settled if the fund will additionally be financed by tax money and to what extent those who possess a private health insurance will have to contribute to this fund (solidarity contribution).

Insurances economising successfully are able to pay back parts of the contributions to their members or offer additional services whereas insurances with expenses exceeding the assigned amount of the fund will have to raise an additional fee for their members. In other words, this fund could be compared to a "health deposit". Each insured person is able to buy certain health services with this money. According to the supporters of the fund model, it gives greater emphasis to the individual decision-making autonomy.

Professor Franz notes that even if that were the case, the question is why to transfer these "health assets" to the fund in the first place. Instead, insured persons could use their resources to directly buy services from the health insurance of their choice. In principle, the fund solution might increase competition among health insurances – dependent on the share of the fee raised or paid out. However, financing the SHI by means of individual, risk-equivalent health contributions would be a much more effective approach. The fund solution constitutes a bureaucratic burden which obviously resulted from political groups acting unreasonably.

According to the ZEW President, the fact that health contributions still depend on salaries is an equally important disadvantage. What is worse is that employers' contributions are financed by means of a payroll tax. Consequently, even wages above the assessment limit and earnings by holders of private health policies will be used to finance the SHI. Current discussions apparently not only focus on wages as an assessment base but also on taking into account entrepreneurial income. By way of analogy, the assessment limit for employees will rise or even disappear. Besides, further income sources such as interests and rents will be subject to contribution liability. Aside from the fact that this immense redistribution mechanism simply has nothing to do within the SHI, it represents a step towards an increased tax financing of healthcare expenditures. The financing process thus becomes more opaque. Furthermore, companies will probably have to face higher labour costs resulting in job losses. Applying such uniform approaches of contributions of a competition parameter, one might get caught between the fronts of different insurance.

From this point of view, the German government wastes the possibility to actually reform the health care system and thus to gain a further economic policy credit, says Franz. The only ray of hope might be the planned review of the SHI’s benefits catalogue, according to which the treatment costs following an accident in high-risk sports will have to be covered by means of a supplementary insurance. However, this should also be valid for the continued wage payments of companies. It is not an employer's responsibility to pay for the consequences of a hang gliding accident.