Sozialer Fortschritt

In Germany, the introduction of flat-rate premiums to the public health insurance scheme is subject to an ongoing debate. If flat-rate premiums are introduced, however, it seems hard to justify the fact that access to private health insurance will be restricted to the wealthy. This paper, therefore, analyzes the effects of simultaneously introducing flat-rate premiums to the public health insurance and granting access to private health insurance to the entire population. It focuses on the question of whether public and private health insurance can still coexist. We show that in the absence of any regulatory intervention, the public health insurance system will survive only if rather special conditions are met; its collapse appears to be the more likely scenario. Yet, it is also shown that a regulator may ensure and enforce the coexistence of both systems by simple legislation. If coexistence is enforced, the public health insurance's flat-rate premium represents the maximum premium guaranteed by regulation.