Health Insurance Reform in Germany. Moving to an Universal Flat Rate System?

Seminar paper from the year 2014 in the subject Economy - Health Economics grade: 130 University of Kassel (Institut für Volkswirtschaftslehre) course: Social Policy language: English abstract: In international comparison Germany ranks 4th among OECD countries in health expenditure as a share of GDP in 2011. It amounted 11.3% of GDP in 2011 which is 2%-points above the OECD average of 9.3%. Only the United States (17.7%) the Netherlands (11.9%) and France (11.6%) are spending more on health. In addition German health expenditure increased in real terms at a rate of circa 2% p.a. on average in 2000-2010 but slowed down to 1.1% in 2011. However expenditure continues to grow. With regard to these figures health care is one of the most important sectors in Germany. With more than 6 million employees and a gross value added of almost € 268 bn in 2013 it represents 11% of the German economy. While expenditure is on the rise the number of contributors who finance the health care system decreases. As a result the question of how to finance the growing demand for health services occurs. In particular a closer look at the statutory health insurance (SHI) is necessary as it financed 57% of total health expenditure in 2011. Since the report Achieving financial sustainability for the social security systems by the Rürup-Commission two major reform proposals are discussed: the citizens' insurance (Bürgerversicherung) a universal system of health care and a system of flat-rate health premiums (pauschale Gesundheitsprämien). These approaches are intensively discussed by politicians and economists who search for an appropriate solution for a health care reform. Therefore the following question should be answered by this seminar paper: Should we move to a universal flat rate system? In order to develop an appropriate recommendation the following questions appear: How does the current health insurance system in Germany look like? Which problems does