Adverse selection in the German health insurance system

  • At the beginning of their career civil servants in Germany can choose between the social health insurance (SHI) system and a private plan combined with a direct reimbursement of the government of up to 70 percent. Most civil servants chose the latter, not only but also because they have to cover all contribution payments in the social system themselves, while normal employees get nearly 50 percent from their employers. The city state of Hamburg decided to change the system by paying a share of the contributions if civil servants choose the social plan. We use a stochastic microsimulation model to analyse which socio-economic types of civil servants could benefit from the Hamburg plan and if this changes the mix of insured persons in the SHI system. Our results show that low income and high morbidity types as well as families have a substantially higher incentive to choose SHI. This reform might thereby increase the adverse selection of high risk cases towards SHI.

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Author:Christian Bührer, Stefan Fetzer, Christian Hagist
Subtitle (English):the case of civil servants
Series (Serial Number):WHU – Working Paper Series in Economics (WP 18/06)
Publisher:WHU - Otto Beisheim School of Management
Place of publication:Vallendar
Document Type:Working Paper
Date of Publication (online):2018/12/03
Date of first Publication:2018/12/03
Publishing Institution:WHU - Otto Beisheim School of Management
Release Date:2018/12/03
Tag:Beamte; Deutschland; Gesetzliche Krankenversicherung; Mitgliedschaft; Negativauswahl
Adverse selection; Civil servants; Germany; Membership; Social health insurance
Page Number:16
Institutes:WHU Economics Group / Chair of Intergenerational Economic Policy
JEL-Classification:H Public Economics / H5 National Government Expenditures and Related Policies / H55 Social Security and Public Pensions
I Health, Education, and Welfare / I1 Health / I18 Government Policy; Regulation; Public Health
I Health, Education, and Welfare / I1 Health / I13 Health Insurance, Public and Private
Licence (German):Copyright for this publication