German healthcare costs likely to rise; PKV

BERLIN, Germany— The head of the German private health insurance association, the Verband der Privaten Krankenversicherung e.V., says that the recently announced compromise on reforms of the state healthcare system will make health insurance coverage significantly more expensive for German citizens.

Earlier this week the ruling SPD party revealed details of a last minute compromise deal between it and coalition partners to save its controversial reforms that will see health insurance become compulsory in Germany.

Under the new system Germans will also be allowed to tap into retirement savings to fund their health coverage.

Reinhold Schulte, manager of the PKV and chairman of Hamburg-based private health insurance company Signal Iduna A.G., said this week that prices for new customers would have to increase by at least 10% because of the new conditions from 2009.

Costs for new customers will increase by at least 12%, said Mr. Schulte.

Late last year Mr. Schulte said that the decision to allow individuals to fund their health insurance via retirement savings was unconstitutional and threatened the government with legal action if it forced the reforms through.

It is not clear currently whether the association will pursue this line of action now the compromise has been agreed.The PKV currently has 48 member companies that collectively serve some 26.4 million individuals. Of these, currently some 8.4 million Germans are totally covered in the private health insurance market with the rest only partially covered.