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Der soziale Ausgleich in der gesetzlichen Krankenversicherung: Income Redistribution under Germany’s Statutory Health Insurance Scheme

Author

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  • Lutz Peter F.
  • Schneider Ulrike

    (Universität Hannover, Institut für Volkswirtschaftslehre, Königsworther Platz 1, D-30167 Hannover.)

Abstract

Premiums under Germany’s statutory health care insurance are not risk-related but incomerelated. Consequently, contributions will - if at all - only accidentally amount to the actuarially fair premium. Underlying this premium setting practice is the principle of solidarity between good and bad risks, as well as the pursuit of income redistribution goals through the public health insurance scheme. Taking risk-equalization as integral to insurance coverage, our analysis focuses on the purely redistributive component of health insurance premiums. We use secondary but nationally representative data from 1990 to measure the efficiency of income equalization in the statutory sickness insurance. Our findings suggest that the current premium setting practice is not conducive to income equalization. The system is inefficient to the extent of producing perverse effects. Hence we support proposals to modify the premium system according to the equivalence principle while using tax-transfer systems to achieve the objective of income redistribution.

Suggested Citation

  • Lutz Peter F. & Schneider Ulrike, 1998. "Der soziale Ausgleich in der gesetzlichen Krankenversicherung: Income Redistribution under Germany’s Statutory Health Insurance Scheme," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 217(6), pages 718-740, December.
    • Handle: RePEc:jns:jbstat:v:217:y:1998:i:6:p:718-740
    DOI: 10.1515/jbnst-1998-0605
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