Private Health Insurance
with a Focus on the Austrian
Modell
Peter Eichler
Chart 1
Private Health Insurance (PHI)
PHI acts within a field of great social
relevance:
Health steadily ranks among the top
concerns of population
Peter Eichler
Chart 2
Private Health Insurance (PHI)
Political consensus that
 access to medicine shall be independent
from wealth
 thus the economic risk for being sick shall
be shared in solidarity
Peter Eichler
Chart 3
Private Health Insurance (PHI)
The state organizes systems of solidarity,
either
 national health services (Beveridge), or
 „social“ insurance bodies (Bismarck)
to be referred to as „Legal Health Insurance
(LHI)“
Peter Eichler
Chart 4
Private Health Insurance (PHI)
The amount of „self insurance“ or PHI is
determined by the „intensity“ of LHI
Peter Eichler
Chart 5
Private Health Insurance (PHI)
What is PHI?
Here:
a business performed by a private
enterprise with the intention of making profit!
Peter Eichler
Chart 6
Private Health Insurance (PHI)
Motivation for accepting PHI:
 Politics
 getting more money into the system
 reduce state spendings
 get transfers
 fighting black market by introducing a
legalized market
 freedom of choice
Peter Eichler
Chart 7
Private Health Insurance (PHI)
Motivation for accepting PHI:
 People
 Expectations of getting more benefits (better
access, better care...)
 cover copayments of LHI
Peter Eichler
Chart 8
Private Health Insurance (PHI)
Motivation for accepting PHI:
 PHI enterprises
 a business modell allowing for profit
(transparency of benefits, sufficient volume,
insurability, stable legal framework)
Peter Eichler
Chart 9
Private Health Insurance (PHI)
Ideal types of PHI
level of
benefit
s
Peter Eichler
PHI
LHI
population
Chart 10
100%
Private Health Insurance (PHI)
1. LHI is exhaustive (covering all necessary
benefits)
PHI covers „higher“ benefits with
„luxury“ appeal (better rooms,
complementary medicine....)
Peter Eichler
Chart 11
Private Health Insurance (PHI)
2. LHI is exhaustive, but there are
copayments
PHI covers copayments
Peter Eichler
Chart 12
Private Health Insurance (PHI)
3. LHI is exhaustive only in theory, in reality
there are deficiencies
PHI acts in „grey“ area or becomes a
duplicate insurance
Peter Eichler
Chart 13
Private Health Insurance (PHI)
4. LHI is officially non exhaustive, but
covers only „basic“ needs
PHI covers more than „luxury“ benefits
Peter Eichler
Chart 14
Private Health Insurance (PHI)
level
of
benefit
s
PHI
LHI
population
Peter Eichler
Chart 15
100%
Private Health Insurance (PHI)
LHI covers only part of population (who
needs social security)
PHI is open for the remaining part
Peter Eichler
Chart 16
Private Health Insurance (PHI)
in reality: mixed modells
substitutive PHI is under political pressure
Peter Eichler
Chart 17
Private Health Insurance (PHI)
tendency for „pseudo“-substitutive PHI
 PHI is allowed to enter the market of
„basic“ insurance
 PHI and LHI compete
 PHI has to adopt principles of LHI
 profitability is reduced
Peter Eichler
Chart 18
Private Health Insurance (PHI)
Conclusions:
 complementary and duplicate PHI tend to
be more profitable
 substitutive PHI tends to be of bigger
volume, but of less (if any) profitability
Peter Eichler
Chart 19
AUSTRIA
Peter Eichler
Chart 20
Social Health Insurance
Peter Eichler
Chart 21
Social health insurance
Social health insurance
 is a compulsory insurance based on the solidarity
principle
 financed by income dependent contributions up to a
certain limit
 the cover provided by the social health insurance
extends not only to the insured themself but to
member of their family, provided they do not pay
contributions on their own name
 99 percent of the population are covered by the
social health insurance
 coverage extends to all „necessary and useful“
treatments
Peter Eichler
Chart 22
Private Health Insurance
Peter Eichler
Chart 23
Private health insurance
 register 2,6 mio. insured person
(that is 32% of the Austrian population)
 as substitute insurance (very small!)
 as complementary insurance for expenses
and other expenditures, which are not
covered by the social insurance
 hospital charges for private room in public
hospitals and additional costs in private hospitals
 1 mio insured persons (that is 13% of the
Austrian population)
Peter Eichler
Chart 24
Principles of the private health
insurance
 Principles of the private health insurance
 insurance for life – no regular
cancellation by the insurer
 premium includes the raising risk with
raising age – no premium increases
because of raising age or illness
possible, therefore
Peter Eichler
Chart 25
Principles of the private health
insurance
 age provisions according to life insurance
 adaption of premium to costs, frequency of
use, expectation of life
 risk assessment with additional premium,
special waiting period, exclusion of
insurance cover for preexisting conditions
Peter Eichler
Chart 26
Principles of the private health
insurance
 insured under private law
 premiums calculated according to the
principle of equivalence per insured
person corresponding to the range of
insurance cover, depend
 on the age of entry
 physical condition
Peter Eichler
Chart 27
Austrian Health Insurers
 76 insurance companies are established in
Austria – 9 companies of them offer private
health insurance
Peter Eichler
Chart 28
 Recent legislation
 Has abolistred differing calculation
according to sex (Unisex ruling of the ECJ)
 Will regulate the insurance for handicapped
persons (Antidiscrimination)
Peter Eichler
Chart 29
classes of insurance
 The private health insurance offers for:
Peter Eichler
Chart 30
hospital expenses insurance
 In-patient hospital treatments – special class
 the insurance covers benefits for
medically indicated hospital stays due to
illness, accident, or childbirth
 full guarentee of cost coverage and directly
charging in a special class two bed room with
partner hospitals
 full guarentee of cost coverage and directly
charging in a special class two bed room in
public general hospitals in Europe
Peter Eichler
Chart 31
association
 contracts with hospitals and physicans
regulate
 prices and
 direct charging with „best price“ clause (mostfavored status clause)
= prerequisite for full guarentee of cost
coverage
 about 170 partner hospitals
 multitude of negotiating partners
(hospitals, physicans, communities...)
Peter Eichler
Chart 32
out patient treatment
 insurance coverage for outpatient treatment
by private physicans
 Reimbursement is made for 80% or 50%
of the costs of medically treatment
indicated due to illness, accident or
pregnancy up to an annual maximum sum
 out-patient medical treatment (including
complementary medicine)
 day clinic treatments
 medically-indicated drugs (including
homeopathic remedies)
Peter Eichler
Chart 33
out patient treatment
 medically-indicated auxiliaries (treatment
aids)
 medically-indicated physiotherapeutic
treatment (treatment aids), ergotherapy,
logopedics
 medically-indicated psychotherapeutic
treatment provided by persons who are
authorised to practice psychotherapy
independently
 for vaccinations (serum, medical fee) in
accordance with vaccination
recommendations of the senior Counsellor
of Health (with the exception of travel
vaccinations)
Peter Eichler
Chart 34
insurance of daily benefits during
hospitalisation
 Hospital daily benefits
 double benefits after accidents
 for stays in a hospice a rate per day will
be paid
Peter Eichler
Chart 35
Thanks a lot
for your attention
Peter Eichler
Chart 36