Almost every country in the world has faced a rise in the costs of health insurance during the coronavirus pandemic. There are multiple reasons behind this upsurge such as the insurance providers have included some serious diseases in their packages as mandated by their respective governments. Another reason is the medical inflation or the Covid-19 claims that the insurance providers have to settle.
In Germany, the price increase in private health insurance has drastically increased in the past year. Research by the Federal Statistical Office shows that private insurance has been hit with a steep rise in fees.
According to the report, the payments for private insurance in March 2021 were 5.3 percent higher than the same month last year, 2020. It took a sharp turn at the end of the previous year as it was 4.9 percent higher in January 2021 than December 2020, reported by the Federal Statistical Office.
If we look at the turn from 2019 to 2020, there was a 2.6 percent raise, while a year earlier than that (2018 to 2019), it was a mere 1.7 percent. This shows the spike in the insurance cost in Germany owing to the novel coronavirus.
The continuous growth in health care and the effects of the novel coronavirus outbreak has been causing this increase in the cost. In Germany, the permanently low-interest-rate level is also one of the factors behind the sudden upsurge.
This year’s spike shows a long-term trend, as per the researchers. Private insurance providers’ contributions have risen by 24.7 percent since 2015. Whereas the general inflation in the same period has been 9.1 percent.
The official figures indicate that 11.2 percent of the population in Germany has opted for private insurance, which covers almost 8.8 million people. The ones who have opted for private insurance have high incomes and international students. However, foreigners living in Germany, who don't have a high income, are forced to go for private insurance as it is difficult to obtain public health insurance if you are not born in Germany – the same is the case for international students.
People in Germany have preferred switching from public to private medical insurance through the challenging period of the pandemic. The outbreak of the virus has disturbed almost every facet of our lives and thus people feel safe to have wider options in their medical insurance. With private insurance, people have access to the best possible range of treatment and choice of well-equipped hospitals in case you contract Covid-19. Public insurance does not cover many
treatments and if you become seriously ill with Covid-19, there is a risk of treatment being highly costly.
The Fitch Ratings predicted an even surge in the rates in late 2021. According to their report, the pandemic will only have a limited effect on the profitability of German private medical insurance providers but it will extend the ultra-low interest rates environment, which will cause the increase in prices. They also predicted that the aforementioned reasons along with the weak economic conditions will affect a downfall in the number of new clients.