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Financial consequences of falling ill: Changes in the German health insurance system since the 1980s


  • Wörz, Markus


The incidence of a health risk may result in two different types of financial consequences: the creation of new needs and the loss of savings and/or income to meet those needs. Illness often requires the purchase of medical help. Although in Germany virtually the entire population is covered by statutory or private health insurance, over time these insurance schemes have become less generous as private out-of-pocket payments continue to rise and, in extreme cases, lead to financial hardship and even poverty. This paper describes the institutional regulations that cover the financial risks of becoming ill and the changes in these regulations since the 1980s. It begins with a structural overview of the German health insurance system, the benefits provided (both in-kind and in-cash) and the evolution of benefits since the 1980s. It then considers the related risk of permanent work-disability and the main institutional means of covering this risk. Here the discussion focuses solely on provisions dealing with loss of income and the changes therein since the 1980s. Aggregate data on short- and long-term illness are then presented to illustrate several effects resulting from changes in institutional rules. The paper concludes with a brief summary of major legislative changes, followed by conclusions and hypotheses about the consequences of occurring risks.

Suggested Citation

  • Wörz, Markus, 2011. "Financial consequences of falling ill: Changes in the German health insurance system since the 1980s," Discussion Papers, Research Unit: Inequality and Social Integration SP I 2011-209, Social Science Research Center Berlin (WZB).
  • Handle: RePEc:zbw:wzbisi:spi2011209

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    References listed on IDEAS

    1. Ebbinghaus, Bernhard, 2008. "Reforming Early Retirement in Europe, Japan and the USA," OUP Catalogue, Oxford University Press, number 9780199553396.
    2. Gericke, Christian A. & Wismar, Matthias & Busse, Reinhard, 2004. "Cost-sharing in the German health care system," Discussion Papers 2004/4, Technische Universität Berlin, School of Economics and Management.
    3. Brockmann, Hilke, 2002. "Why is less money spent on health care for the elderly than for the rest of the population? Health care rationing in German hospitals," Social Science & Medicine, Elsevier, vol. 55(4), pages 593-608, August.
    4. Nicolas R. Ziebarth, 2009. "Langzeitkranke verlieren durch Kürzung des Krankengeldes fünf Milliarden Euro," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 76(20), pages 326-332.
    5. Greß, Stefan & Walendzik, Anke & Wasem, Jürgen, 2005. "Nichtversicherte Personen im Krankenversicherungssystem der Bundesrepublik Deutschland: Bestandsaufnahme und Lösungsmöglichkeiten," IBES Diskussionsbeiträge 147, University of Duisburg-Essen, Institute of Business and Economic Studie (IBES).
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