The question of health insurance for start-ups. Interview with Frank Mayer
Frank is the Regional Managing Partner for BARMER in Frankfurt am Main and has been advising businessmen and businesswomen in the Rhine-Main Region since 2015.
Mr Mayer, young entrepreneurs, and those who want to become entrepreneurs are often faced with questions about what makes for good health insurance when you are self-employed. Of course, there are alternatives to voluntary continued insurance under the statutory health insurance system (SHIS). Private health insurers look appealing during the first few economically challenging years of the start-up. What do self-employed people need to know in order to make a prudent choice at this stage?
Above all, they should consider long-term development in their decision. For years, the premiums for private health insurance (PHI) were relatively stable, so that there was quite a long time period in which you could save money if you had PHI rather than statutory health insurance. Often, you only had to pay more for PHI when you were 50 to 60 years old, and the average age expectancy was significantly lower. The calculation was correct in most cases. However, the difference in premiums compared to SHI now disappears much earlier, for most people when they turn 40. The period in which PHI premiums are higher than SHI premiums is - with higher life-expectancy – much longer. Ten years of savings now often means 40 years paying more for PHI. According to a study by "Finanztest", you should anticipate having to pay at least three times the initial premiums for PHI when you reach 40.
Aside from these economic considerations, how do the ranges of services compare? Are statutory health insurers competitive in this respect?
Apart from the statutorily prescribed scope of services, all health insurers – the statutory ones too – negotiate their specific scope of services through supply agreements. For those with SHI, a broad spectrum of additional insurance, such as for additional dental care, is also available. The assumption that you will always get better care with PHI because of the higher premiums is no longer tenable. For BARMER, for example, health checks and preventative measures, remedies and therapeutic aids, high quality standards and seamless medical care, as well as the protection of the family are very important. Self-employed entrepreneurs must therefore ask themselves "What will my life look like in the future? What care will I need? What will these decisions mean for my partner or children?"
What role should family planning play in the choice of health insurers?
The choice between private and statutory health insurance is a choice of system, which will have wide-ranging consequences for the future. If you fail to plan here, you might make decisions that have an impact on your spouse or children down the line. In contrast to statutory health insurers, private health insurers do not offer free family insurance; instead, a premium must be paid for each child. There are no maternity benefits and often no sickness benefits in the case of an ill child. PHI does not take into account changes to your professional life, such as part-time positions or parental leave, while SHI is based on current income. In fact, you can only go back to SHI when your salary sinks below the so-called annual wage limit (Jahresarbeitsentgeltsgrenze). In 2020, this limit is EUR 5,212.50. When you reach 55, there is no going back, even in the case of unemployment.
Which system adapts better to complex and changing lifestyles?
Young people in particular need flexible health insurance that adapts to suit their position in life, their goals and their aspirations. For this reason, legislators recently strengthened the rights of the insured: in the future, it will be easier to change to a different health fund, increasing competition between SHIs. In contrast, taking out PHI is more like signing a contract to bind yourself to the same mobile phone tariff for your whole life. BARMER aspires to react to transitioning modern lifestyles and to continue to offer leading health care concepts for people with the initiative and courage to start their own company. That’s why the Family-Plus Bundle from BARMER is particularly designed for the everyday, working and family lives of parents and children – who knows, perhaps starting a family will follow starting a company.