Risk compensation

The risk compensation is designed to offset the varying policyholder risk structures of the individual health insurers. Health insurers with an above-average number of older insureds who had a hospital/nursing home stay in the previous year and thus higher treatment costs are compensated financially by part of the premium income from younger, healthier insureds.

The Gemeinsame Einrichtung KVG (collective institution KVG) calculates the contributions that health insurers with a high number of good risks have to pay.

• As of 1996, only the factors “age” and “gender” of the insured persons applied to determine the risk structure of a health insurance company. This meant that health insurers who had fewer women and fewer older insureds than the average for all health insurance companies had to make compensation payments.
• In 2012, “increased risk of illness” was added as an additional criterion. This includes insureds who were treated in a hospital or nursing home for at least three days in the previous year.
• Since 2017, the cost of medicines in the previous year are also taken into account to calculate the compensation formula. This means that additional cost-intensive insureds who were not treated in a hospital or nursing home in the previous year are also recorded.
• And beginning in 2020, drug costs are included in the calculation separately by pharmaceutical cost group.