Adverse Selection in the German Health Insurance System – The Case of Civil Servants

Christian Bührer (), Stefan Fetzer and Christian Hagist

No 18-06, WHU Working Paper Series - Economics Group from WHU - Otto Beisheim School of Management

Abstract: At the beginning of their career civil servants in Germany can choose between the social health insurance (SHI) system and a private plan combined with a direct reimbursement of the government of up to 70 percent. Most civil servants chose the latter, not only but also because they have to cover all contribution payments in the social system themselves, while normal employees get nearly 50 percent from their employers. The city state of Hamburg decided to change the system by paying a share of the contributions if civil servants choose the social plan. We use a stochastic microsimulation model to analyse which socio-economic types of civil servants could benefit from the Hamburg plan and if this changes the mix of insured persons in the SHI system. Our results show that low income and high morbidity types as well as families have a substantially higher incentive to choose SHI. This reform might thereby increase the adverse selection of high risk cases towards SHI.

Keywords: Health insurance; adverse selection; civil servants; microsimulation (search for similar items in EconPapers)
JEL-codes: H55 I13 I18 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2018-12-02
New Economics Papers: this item is included in nep-hea and nep-ias
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Persistent link: https://EconPapers.repec.org/RePEc:whu:wpaper:18-06

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