The evolution of private medical expenses for civil servants in Germany

• Published in: Zeitschrift für die gesamte Versicherungs-Wissenschaft 2022-12, Vol.111 (4), p.515-533
• Main Author: Ortmann, Karl Michael
• Format: Article
• Language: English
• Subjects: Abhandlung; Commercial Law; Economics and Finance; Finance; Investments and Securities; Macroeconomics/Monetary Economics//Financial Economics; Public Health
• ISSN: 0044-2585; 1865-9748
• DOI: 10.1007/s12297-022-00540-5

In this study we analyse private medical insurance data with respect to civil servants in Germany. This data is applied to pricing purposes in the market and may therefore be deemed as useful. In particular, we discuss average health care expenditure per capita by age over time. Thereby, we analyse inpatient and outpatient benefits as well as hospital cash and dental insurance. In essence, we observe an effect that we call the rectangularisation of the cumulative health care expenditure curve. In line with this finding, we note that the modal age (at which total medical expenses for in force business are highest) has increased by 10 years of age over the last decade with respect to inpatient benefits. Moreover, we apply a linear regression model based on mortality rates as regressor. We use the Siegel test for comparing different expenditure profiles and judging goodness of fit. As a result, we find that steepening of private medical expenses by age over time is prevalent for three out of four benefit types in certain age bands. As for outpatient claims provided to male civil servants, medicalisation dominates the evolution of the average claim amount by attained age over time. On the other hand, compression is of relatively high importance for inpatient claims.