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How to Finance Social Health Insurance: Issues in the German Reform Debate

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  • Friedrich Breyer

    (University of Konstanz and DIW, Berlin)

Abstract

In view of the rapidly rising contribution rates in the Statutory Health Insurance system and the persistently high unemployment rate, Germany has recently debated radical changes in the mode of health care financing. Among the controversial reform proposals were the possible expansion of mandatory membership to the whole population and the uncoupling of health insurance contributions from wage income. The main arguments in the German debate are presented and discussed. It is shown that there are valid welfare-economic reasons both for universal coverage and income-independent contributions. Moreover, it is demonstrated that the efficiency gains implicit in a transition to flat-rate contributions can be achieved in a distributionally neutral way if the measure is combined with an appropriate reform of the income tax system. Finally, it is shown that the replacement of pay-as-you-go financing by funding within social health insurance, while seemingly increasing the sustainability of the system, may create important additional problems. The Geneva Papers on Risk and Insurance (2004) 29, 679–688. doi:10.1111/j.1468-0440.2004.00310.x

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Bibliographic Info

Article provided by Palgrave Macmillan in its journal The Geneva Papers on Risk and Insurance.

Volume (Year): 29 (2004)
Issue (Month): 4 (October)
Pages: 679-688

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Handle: RePEc:pal:gpprii:v:29:y:2004:i:4:p:679-688

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Cited by:
  1. Roll, Kathrin & Stargardt, Tom & Schreyögg, Jonas, 2011. "Effect of type of insurance and income on waiting time for outpatient care," hche Research Papers 2011/03, Hamburg Center for Health Economics (hche), University of Hamburg.
  2. Susanna Kochskämper, 2012. "Reformdebatten in der Krankenversicherung vor dem Hintergrund des europäischen Binnenmarktes," Otto-Wolff-Institut Discussion Paper Series 02/2012, Otto-Wolff-Institut für Wirtschaftsordnung, Köln, Deutschland.

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