PKV should pay attention to inflation on retirement provision

The private health insurance companies should pay attention to the medical inflation in the retirement provision in the future. This could be achieved if all insured persons would pay equal supplements, according to the vision of the HUK-Coburg CEO.

(20.11.2010)
The head of HUK-Coburg CEO warned at a trade meeting, the industry of private health insurance, in the future, the stronger „medical inflation“ as well as the associated cost increases. The private health insurance must make far-reaching changes, so that the higher costs are reflected in the old age provisions.

Private health insurance companies would have to pay more attention to medical inflation and the associated higher treatment costs in the future. Inflation should be reflected not only in insurance premiums, but also in provisions for old age. "The PKV has the problem that the aging provisions are calculated on the basis of the health expenditure, which we know today", argued the HUK-Coburg CEO. Hans Olav Herøy at a symposium of the Association of Business Economists for Insurance in Cologne. However, medical inflation is not included, as Herøy added. Accordingly, it is important to consider the premiums adjustments not only for the higher expenditure, but also for the underestimated retirement provision.

Under one „medical inflation“ One understands the aspect that health care expenditures continue to rise as newer treatments are developed and more and more new medicines are on the market and their costs are also rising. Through the further development of medical care, the contributions must be increased. However, this automatically creates a financial mismatch between contributions and retirement provisions. This in turn means that the contribution increases are even greater.

Such a reorganization of the private health insurance system initially also causes higher contributions. In the long term, however, this could reduce the financial burdens of old age, according to Heroy's vision. At the moment, insured persons would face a whole series of premium increases due to higher expenses and lower interest rates. On the other hand, some private health insurance providers are trying to attract freelancers and the self-employed as new customers with very low entry-level tariffs. The method of acquiring new customers, however, is a pity for the entire industry. The providers hope again and again on the far-reaching support of the black-yellow coalition, which in turn has already simplified the entry requirements for employees in essence, so that the PKV can win more new customers.

The consequence is that old customers have to pay much higher insurance premiums than new customers. This also applies if the new customer has the same entry age as the existing customer. "The existing customer has no guarantee that the stock contribution is not higher than the new business contribution," said Herøy.

However, it is far from the case that private health insurance has been inactive in this development. Recently, according to the HUK-Coburg boss, the private health service has done a lot to minimize inequality. He cited three key measures that have been implemented so far. So you have adjusted the contribution by ten percent. The provisions for old age were hedged with the formation of interest gains and the capping of premium increases with provisions. Thus, the PKV has almost solved the problem to this day. But these methods alone are not enough to secure the future. A current example of this is currently low interest rates in the markets. Due to the economic crisis, the interest rate development is currently subject to strong fluctuations. "We should take the last small step," Herøy told his colleagues.

The private health insurance companies should take into account, with each adjustment of the membership dues, what is the gap in the retirement provision. Only then should the providers of all, including the new customers, demand a meaningful surcharge. This proposal would revolutionize the private health insurance system and includes some kind of justice. Because younger people would have to pay the same supplement as the older customers. However, the younger pay the supplement longer than the old. "The alternative would be to let older customers pay the gap on their own." However, this leads to discontent among the existing customers, because the ever increasing contributions to older customers also disturbs the reputation of the industry.

Although the new proposed model leads to further increases in contributions, it would not increase contributions overall. For a full insurance of an old customer, the necessary premium increase would be in the "low single-digit percentage range". Depending on the type of tariff, the adjustments are between zero and three percent.

However, it is important that all private health insurance companies work together. In addition, for advertising reasons, it would not be bad to say: „You will never have to pay more than someone who enters the PKV at the same age as you, "explained Heroy, saying that the industry should decide on the proposed model together. (Sb)

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