To ensure that health insurance remains efficient and affordable in the future, especially in view of demographic developments and advances in medical technology, we need far-reaching and sustainable structural reforms that address both the financing and the benefits side. On the financing side, income-independent health care premiums are the best way to achieve this. On the benefits side, the most important thing is to intensify competition and focus the list of tasks on basic coverage.
The central reform step must be to completely decouple the financing of health care costs from the employment relationship. The best way to achieve this is to switch financing to income-independent health premiums with payment of the employer's share in gross wages and tax-financed social compensation for those on low incomes. In such a health premium model, neither wage and salary increases nor premium increases can lead to higher additional personnel costs. Social compensation can be organized more precisely and transparently via the tax and transfer system than via statutory health insurance. The necessary redistribution volume can thus be reduced. Today's wage-based contributions act like a punitive tax on labor.
Strengthening competition and expanding personal responsibility
Demand-oriented, quality-assured and cost-effective structures and services in the health care system require competitive management processes and room for maneuver for all market participants. The expansion of competitive elements is one of the most effective means of limiting the development of expenditures, in particular to avoid inefficiencies in the provision of services and in organizational structures, as well as false incentives for insured persons and service providers. What is needed, therefore, is greater contractual freedom for health insurers to negotiate prices, volumes and quality with service providers - in compliance with antitrust and competition regulations - and greater scope for health insurers to offer insureds different forms of care.
A state-organized health care system financed by compulsory contributions can only remain efficient and affordable if it is limited to basic coverage. The goal should be to ensure that, as a matter of principle, only those services are financed that are necessary, evidence-based and economically provided. In addition, deductibles provide incentives for health-conscious and cost-conscious behavior on the part of the insured and take into account the principle that, in accordance with the principle of subsidiarity, a social insurance system should only provide benefits that the individual cannot pay for himself. Burden ceilings prevent individuals from being overburdened. A state-organized health care system financed by compulsory contributions can only remain efficient and affordable if it is limited to basic coverage. The goal should be to ensure that, as a matter of principle, only those services are financed that are necessary, evidence-based, and provided economically. In addition, deductibles provide incentives for health-conscious and cost-conscious behavior on the part of the insured and take into account the principle that, in accordance with the principle of subsidiarity, a social insurance system should only provide benefits that the individual cannot pay for himself. Upper limits on the burden prevent individuals from being overburdened.
In addition to social contributions, continued payment of wages is a huge cost item for employers
Continued payment of remuneration in the event of illness, maternity and medical treatment remains by far the most expensive social benefit financed exclusively by the employer. According to the current social budget, continued pay costs amounted to €58.8 billion in 2019. In addition, there are the employer's social security contributions due on this amount. This results in additional costs of around €12.5 billion. The costs for continued pay alone, totaling €71.3 billion, would correspond to 4.7 contribution rate points in health insurance. In addition, companies also finance the health insurance funds' sick pay payments on a pro-rata basis. In 2019, they will have to pay around €4.2 billion for this item. In total, this results in costs of around €75.5 billion per year for companies due to sickness-related absences.
Contribution rate development in the statutory health insurance system; The figures relate to January 1 of each year - comprises contribution rate of 14.6% and average additional contribution rate; Source: Federal Ministry of Health, 2018.