Two health insurance companies threatened by bankruptcy

Two health insurances are about to go bankrupt: City BKK and Vereinigte IKK

16/04/2011

Just two years after the introduction of the health fund, two public health insurance companies have been in serious financial distress. As the Handelsblatt reports, the first billing quarter 2011 decides whether the company health insurance company City BKK will be closed or may continue. The United IKK has already requested millions of euros in grants to ensure that the insured can be covered.

Bankruptcy decision at City BKK in May
Two statutory health insurance companies in Germany seem to be in serious financial difficulties. For at least one health insurance company, City BKK, headquartered in Stuttgart, could already be closed in May. As early as last year, the health insurance fund was the first GKV to introduce an additional contribution of eight euros per month per member. Because the financial allocations of the health fund were not sufficient, the fund had to raise the additional contribution at the beginning of 2011 by five euros to a total of 15 euros. Through the introduction of the new additional contribution „we expect about 20,000 cashier less“, said a spokesman for City BKK. Speculation whether the cash register is closed, however, rejected the cashier. Finally, the quarterly result must be awaited. Only then does the Federal Insurance Office decide if the company health insurance fund will be closed. A final result is expected in early May.

On the first of March this year Oliver Reke took over the cash management board. He replaced interim CEO Dr. Bernhard Amshoff, because due to the miserable situation, the old board resigned in November. If it came to an early bankruptcy, the new board had little opportunity to implement structural reforms. The position would be short lived.

The Federal Association of Health Insurance Funds (BKK) sees the future less optimistic. Here one starts from a closure. The debts and ongoing treatment costs would then have to be taken over by the other funds in the network. For the insured themselves, however, no threatening situation arises, as the health economists assure, statutory health insurance companies are obliged to take the members, regardless of their state of health or family status, if the City BKK closes.

Required grants for the United IKK
The second largest guarantor of health insurance, the United IKK, has also been in financial distress. The fund has already submitted a grant application to the group of guilds. As reported by the United IKK, allocations from the health fund are no longer enough to ensure the long-term care of the approximately 1.6 million insured persons. As reported by internal cash registers, the cashier needs a grant of about 50 million euros to mitigate a bankruptcy risk. So far, this application has not yet been decided in the IKK Association. In April of last year, the fund had sought a merger with the IKK Classic. Due to the miserable financial situation of the United IKK, the merger was canceled.

Member loss due to additional contributions
While the United IKK waived additional contributions and thus even recorded a slight increase in membership (plus 26,000), the City BKK is literally running away from the insured. But both health insurance companies mainly suffer from their own membership structure. Many members of the City BKK live in Hamburg and Berlin. Naturally, in the big cities, the cost of treating doctors and clinics is higher than the national average. In addition, older and chronically ill people are insured in the City BKK. This means high expenditure and comparatively little revenue. The additional contribution has also provoked a heavy loss of members. (Sb)

Also read:
Imminent bankruptcy of City BKK
Rescue of the ailing health insurance companies
Bankruptcy of health insurance funds averted
Health insurance City BKK & GBK threatened by bankruptcy
City-BKK saved from insolvency?
Is the health insurance City-BKK broke?
Two health insurance companies are broke

Picture: Gerd Altmann