Germany Private healthcare insurance are rising
In the first part of the insurance messenger interview, insurance consultant Gerd Güssler explained that the premiums in private health insurance will rise again this year. But in many tariffs, the premium adjustments are justified and the fear of astronomical premium explosions partly medial panic. Thus, the insured could respond to price jumps, if they only exercise their rights sufficiently. Now we talked in detail about the impact of the low interest rate on the premiums.
Versicherungsbote: To come back to the premium jumps in private health insurance to come: what is the proportion of low interest here? And is private health insurance able to survive for several years? Maybe even health insurers have to give up?
And what does the discontinuation of this contributor actually mean for the individual private health insurance company?
Güssler: You can apply a rule of thumb: Percentage of discounting interest rate is about one percent premium adjustment. But not on the total contribution, but on the corresponding substitutive share: actuaries assume that the interest rate will not fall below one percent – to justify this, would go beyond the scope. Then, as a result of the reduction in net interest rates, a premium adjustment of a maximum of 25 percent on the corresponding contribution share would be expected. Let’s take an example: a classic old bisex rate, calculated at 3.5 percent interest rate, 400 euros premium for the substitutive share. From this 25 percent: results in a maximum of 100 euros premium increase as a result of the discount rate reduction. About half of this goes into the old-age provision, which finances the higher costs of retirement as a reserve.
So is the low interest rate most important cause of the premium jumps in private health insurance?
GüsslerLow interest rates are only one cause for higher contributions, there is a stronger one: the segregation of the collective between the healthy and the sick. That too drives up the contribution. Due to the tariff change according to § 204 the industry breaks the contributions themselves. That’s difficult to explain. If we are two in a collective, pay 500 euros contribution and spend about the same in case of illness, then we would be a good collective, because revenue and expenditure are in balance. Now I am sick and produce 750 euros medical expenses. If I take these costs into another collective, then I already charge this with 250 euros, which I do not even finance with my contribution. The cost of the other is rising, he might have to pay his own treatment in case of illness, This makes it difficult for the actuaries to calculate the tariff. Ultimately, the back and forth between the tariffs means only a postponed contribution adjustment. The Umdeckungsfirmen, which offer the tariff change according to VVG § 204 only for contribution reasons, make the PKV enterprises more broken than the reduction of the net interest.
But now you can also see this from the consumer’s point of view. For them, it is very desirable that there is this exchange option under § 204!
Güssler : I am absolutely in favor of a tariff change when it comes to tariff optimization in the interests of the consumer. For example, get out cheap and pure in quality. Or take, for example, the merger between Signal and Deutscher Ring insurers: Ring customers have access to Signal and Signal customers have access to Ring. That’s a brilliant thing.
What I criticize, however, are those alleged tariff optimizers, which is for high fees only to reduce premiums and actively advertise the customer. They say, “You pay too much!”, But they do not tell their customers what disadvantages they would have when switching to the new tariff, such as lost services, economic disadvantages on the line, too little accumulation of aging provisions, loss of the standard tariff et cetera. Also, the timing of a change in tariffs is crucial: for example, if the reduction is done in retirement, I can look at it quite differently.
I do not torpedo the tariff change 204. Good that there is this option! There could be even more. If I could bring collective collectives together, or as Debeka shows, that strong-collectives are powerful, or Old Oldenburg, Hallesche, or Universa, to name a few incomplete names, more could be done for the insured. Who are the hunted out there at § 204? The companies that have many parallel tariffs and tariff works. AXA, Barmenia, Central, or the foot of Victoria, Zurich, Global DKV for example: There is hunted. And we have one or two insurers on the market who, thanks to their collective bargaining policy, also like to chase customers away from other companies. This company hopping and the “wrong” 204 change, which also leads to contributions.
The contributions in private health insurance are rising again this year – but for what reasons? And do they rise adequately or are the policyholders overburdened? In the second part of the insurance messenger interview with Gerd Güssler, the health insurance expert explains that the increase in premiums in private health insurance can not be attributed solely to low interest rates, but is also home-made: the segregation of the collectives is driving up the premiums. Gerd Güssler is an insurance consultant from Freiburg and founder of the market observer.