New models of long-term care insurance in demand

PKV criticizes proposal of the statutory health insurance for long-term care insurance

01.09.2011

The Federal Minister of Health Daniel Bahr (FDP) had expressed in the past month in view of the looming deficit in long-term care insurance to build up a capital stock for an individual long-term care insurance. The central association of statutory health insurance companies also advocated supplementary long-term care insurance in order to secure long-term performance despite the demographic change and the associated rising costs.

The proposals of the GKV-Spitzenverband, however, meet with the Director of the Association of Private Health Insurance, Volker Leienbach, on strong rejection. Although welcome the private health insurance, „That now also the central association federation of the legal health insurance recognizes the necessity due to the demographic change to take additional precautionary measures for the assurance of the achievement level in the long-term care insurance.“ But in the opinion of Volker Leienbach is „the proposal of the GKV-Spitzenverbandes to form a so-called reserve within the framework of the statutory long-term care insurance, for completely unsuitable.“ For in the statutory health and long-term care insurance, each financial reserve is subject to political influence, which always runs the risk that the policy for other purposes on the funds fall back and the funds in the end not those in need of good, said Leienbach. In the opinion of the Director of the Association of Private Health Insurance, the proposed model of the GKV-Spitzenverbandes would only bring care on a cash basis.

Cycle-dependent care benefits?
Already more often in the past existing capital reserves have been diverted, so that the danger would exist even with a reserve for long-term care insurance, said Volker Leienbach. According to the Director of the Association of Private Health Insurance Funds, long-term care insurance funds would be safe from political intervention only under private-sector contracts. The capital stock should absolutely be created state-remote, so Leienbach on. In the name of the PKV Leienbach also criticized the proposal of the GKV-Spitzenverband to tie the annual increase of the financial reserve to the respective economic development. This proposal goes beyond reality, because demographic trends and the associated rising costs in the care sector are not dependent on economic development. According to Volker Leienbach, such a model would not provide a basis for sustainable provision. Because in worse economic phases and times of economic crises would be provided according to the GKV model ultimately less and the care would be dependent on the respective after cash position, said the director of the PKV Association.

Volker Leienbach therefore advocates relying on the expertise of private insurance companies to build up reliable long-term care insurance. These have had decades of experience in calculating the risk of care and their capital stock has a stable growth based on interest and compound interest. The objection of the statutory health insurance companies that financial crises could bring with private pensions a considerable risk, does not apply in the opinion of Volker Leienbach. For the capital stock of private long-term care insurance, managed under particularly strict security regulations, has so far survived all banking and financial crises without prejudice. For example, private health and long-term care insurance has been able to record a continuous increase in the capital stock for years, irrespective of economic developments.

Long-term care insurance business promises massive growth
In the background of the criticism of the Director of the Association of Private Health Insurance to the proposal of the GKV-Spitzenverbandes should also be business interests. Because the market of long-term care insurance promises a massive growth in the course of demographic change and the private insurance companies hope for a substantial return. However, this return must be generated from the contributions of the insured, which could lead to a higher long-term care contribution in case of doubt. Nor can the previous positive development of the capital stock in private nursing care insurance be used as an argument for lasting crisis security. So industry experts are quite of the opinion that a state insurance of long-term care insurance would make this much more crisis-proof. The misappropriation of state reserves by the politicians also seems rather absurd at this point, since with a clearly recognizable growing need in the field of long-term care insurance, most likely no politician would get the idea to use the funds elsewhere. Thus, the statement of the Association of private health insurance gives a little the impression that business interests clearly outweigh. (Fp)

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Picture credits: Rike