1. Home
  2. Studies
  3. Would universal health insurance lead to more solidarity?: Measuring the solidarity principle in Germany’s statutory health insurance system
Martin Beznoska / Jochen Pimpertz / Maximilian Stockhausen IW-Analyse No. 143 13. July 2021 Would universal health insurance lead to more solidarity?: Measuring the solidarity principle in Germany’s statutory health insurance system

The principle behind Germany’s statutory health insurance (SHI) system, into which all employees up to a certain income threshold are obliged to pay a per¬centage of their earnings, is one of solidarity.

Download PDF
Measuring the solidarity principle in Germany’s statutory health insurance system
Martin Beznoska / Jochen Pimpertz / Maximilian Stockhausen IW-Analyse No. 143 13. July 2021

Would universal health insurance lead to more solidarity?: Measuring the solidarity principle in Germany’s statutory health insurance system

Download PDF

Share this article:

or copy the following link:

The link was added to your clipboard!

German Economic Institute (IW) German Economic Institute (IW)

The principle behind Germany’s statutory health insurance (SHI) system, into which all employees up to a certain income threshold are obliged to pay a per¬centage of their earnings, is one of solidarity.

Currently about four out of ten statutorily insured persons make a solidarity contribution by paying in more than the average benefits accruing to those of their age and gender. The remaining sixty percent of SHI members contribute correspondingly less. In total, just under 37 percent of SHI expenditure is financed by this solidarity-based redistribution. The universal insurance scheme currently under discussion (commonly known as a Bürgerversicherung or ‘citizens’ insurance’) aims to strengthen the principle of solidarity by drawing in those currently excluded and thus, according to its proponents, distribute the burden more “fairly”. If the SHI system as it is now applied were extended to the entire population, the contribution rate could be reduced by 0.8 to 1.0 percentage points, thus permanently relieving the burden on those already statutorily insured. However, changing demographics, progress in medical technology and misaligned incentives are continuing to push up health care expenditure well beyond the general cost of living. Given this, the SHI con¬tribution rate would return to its current level after only some six years – with an ongoing upward trend. Despite the change in the cross-sectional distribution of the burden, any increase in the solidarity effect would not be long sustained. In a universal insurance scheme the share of net contributors paying in at the re¬duced contribution rate would increase only slightly, and the proportion of SHI expenditure financed by redistribution would barely reach the level in the system as it is now. Moreover, with an ageing population, an overall balance in solidarity can only be achieved at the expense of intergenerational solidarity, as contribu¬tion rates rise and the younger cohorts shoulder ever higher solidarity burdens. This raises the question as to whether the solidarity principle is justified at all. By contrast, limiting benefit entitlements financed according to the SHI’s current pay-as-you-go system – and supplementing them with funded elements – would help to establish solidarity-based redistribution on an intergenerationally fair footing.

Download PDF
Measuring the solidarity principle in Germany’s statutory health insurance system
Martin Beznoska / Jochen Pimpertz / Maximilian Stockhausen IW-Analyse No. 143 13. July 2021

Would universal health insurance lead to more solidarity?: Measuring the solidarity principle in Germany’s statutory health insurance system

Download PDF

German Economic Institute (IW) German Economic Institute (IW)

Share this article:

or copy the following link:

The link was added to your clipboard!

More on the topic

Read the article
New attempt to harmonise corporate taxation in the EU
Tobias Hentze / Samina Sultan IW-Report No. 7 3. February 2023

New attempt to harmonise corporate taxation in the EU

In the course of 2023, the European Commission plans to present a proposal for a new corporate tax system under the title "Business in Europe: Framework for Income Taxation (BEFIT)".

IW

Read the article
Tobias Hentze / Michael Hüther IW-Policy Paper No. 5 24. September 2022

Effective aid programs in the energy price crisis

The energy price crisis is a huge challenge for economic policy. With the three relief packages, the government has given some important support, but the economic policy lacks a stringent line. All measures should currently have the top priority to secure ...

IW

More about this topic

Content element with id 8880 Content element with id 9713