Statutory and private health insurance in Germany and Chile: two stories of coexistence and conflict

In Germany and Chile, the market for private health insurance exists alongside and “within” a statutory health insurance system that covers a large majority of the population. Private cover comes in two forms: substitutive, chosen to replace statutory cover, which means that the privately insured do not contribute to this aspect of the social security system (unless statutory health insurance is partly funded through the government budget); and complementary or supplementary, allowing people to “top up” publicly financed benefits. In both countries, the vast majority of the population is covered by statutory health insurance. However, some parts of the population, mostly those who are able to afford it, have the option of choosing between private and statutory coverage. In Germany, the group of people given this choice is limited by regulation, with those allowed to “opt out” of the statutory system having to demonstrate that they have earnings above a threshold. Once they have chosen the private option, the possibility of returning to statutory cover is limited. In Chile, choice of substitutive private cover is also dependent on earnings as a private plan is significantly more expensive than contributions to the statutory system, but there is no fixed threshold for those who wish to opt out. Also, the privately insured in Chile are allowed to re-enter the statutory system at any time, an option that has been intentionally precluded in the German system to reduce the potential for further risk segmentation. This chapter describes the origins and development of private health insurance in Germany and Chile, providing a comparative assessment of its effects on consumers and the health financing system as a whole. The chapter provides a detailed overview of the market for private health insurance in both countries, followed by a comparative assessment of the impact of private cover in relation to financial protection, equity