Social Democrats Call for Greater Access To Private Insurance

Though private insurance has been available to Germans for a number of years, under current German law private insurance is only available to those who earn at least €3,825 ($4,296) per month. But under a new proposal from the SPD, private insurers in the future would be required to provide coverage to any citizen who sought to pay for it -- regardless of income or profession.

"We want the competition to be about providing the best healthcare structures, not about the best risks," read the SPD's proposal, according to a Tuesday report in the mass circulation Bild newspaper. "Those who earn more, or who are young and healthy, should not be exempt from solidarity when it comes to health insurance."

Balancing the load

By spreading the burden of healthcare costs more evenly between state and private insurers, the SPD expects the level of state health fund contributions -- presently at 14.3 percent of gross monthly income -- to sink to under 13 percent.

So far, private insurers have reacted skeptically to the proposals. Though the industry is considering the government’s proposal, a spokesman told Deutsche Welle he was skeptical the SPD plan would have the desired effect of improving competition with state insurers. By forcing private insurers to take on low-income customers, pensioners and others, costs would automatically rise for the insurer, he noted.

"Opening up the option of private insurance to everyone sounds like a good idea at first," said Christian Weber, spokesman for PKV, a German association representing private medical insurance companies. "But I have to ask myself the question of how this would encourage fairer competition when there’s a penalty for us already built in."

Saving Germany's social system

The plan is part of an overall reform concept by the SPD and its coalition partner, the Greens, to introduce a "citizen's insurance." Green Party leadership say a system that secures social welfare on a wider basis could be the answer to Germany's problems.

The Greens propose extending mandatory welfare contributions to all citizens -- in particular, politicians, civil servants and self-employed people who are not now required by law to pay into the system.

Coalition disagreements remain

But differences are emerging between the SPD and the Greens as they try to hammer out the details of how their citizen's insurance would work. Under the current system, social costs such as health and unemployment insurance are evenly split between employers and employees.

The Greens want to cap the employer contribution at 6.5 percent, but the SPD has so far rejected any calls to put a rate ceiling in place. "We can't speak of a permanent freeze on contributions when we know that that healthcare costs are going to rise," said Family Affairs Minister Renate Schmidt, a Social Democrat.

Meanwhile, Guido Westerwelle, who heads Germany's neo-liberal Free Democratic Party, sharply criticized the citizen's insurance concept. "It's a vicious cycle -- and an expensive one at that," Westerwelle said, arguing that more people paying into the system would translate to more people claiming benefits, pushing costs even higher.