Financial risk protection in private health insurance: empirical evidence on catastrophic and impoverishing spending from Germany's dual insurance system

Financial risk protection from high costs for care is a main goal of health systems. Health system characteristics typically associated with universal health coverage and financial risk protection, such as financial redistribution between insureds, are inherent to, e.g. social health insurance (SHI)...

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Published in:Health economics, policy and law policy and law, 2024-01, Vol.19 (1), p.3-20
Main Authors: Hengel, Philipp, Blümel, Miriam, Siegel, Martin, Achstetter, Katharina, Köppen, Julia, Busse, Reinhard
Format: Article
Language:English
Subjects:
Civil service
Disaster insurance
Expenditures
Health care expenditures
Health care industry
Health care policy
Health economics
Health insurance
Households
Insurance coverage
Payments
Personal expenditure
Population
Poverty
Premiums
Redistribution
Risk
Social health insurance
Variables
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Summary:Financial risk protection from high costs for care is a main goal of health systems. Health system characteristics typically associated with universal health coverage and financial risk protection, such as financial redistribution between insureds, are inherent to, e.g. social health insurance (SHI) but missing in private health insurance (PHI). This study provides evidence on financial protection in PHI for the case of Germany's dual insurance system of PHI and SHI, where PHI covers 11% of the population. Linked survey and claims data of PHI insureds (n = 3105) and population-wide household budget data (n = 42,226) are used to compute the prevalence of catastrophic health expenditures (CHE), i.e. the share of households whose out-of-pocket payments either exceed 40% of their capacity-to-pay or push them (further) into poverty. Despite comparatively high out-of-pocket payments, CHE is low in German PHI. It only affects the poor. Key to low financial burden seems to be the restriction of PHI to a small, overall wealthy group. Protection for the worse-off is provided through special mandatorily offered tariffs. In sum, Germany's dual health insurance system provides close-to-universal coverage. Future studies should further investigate the effect of premiums on financial burden, especially when linked to utilisation.
ISSN:1744-1331
1744-134X
1744-134X
DOI:10.1017/S1744133123000105