Solidarity principle: why statutory health insurance contributions depend on income

In statutory health insurance, every insured person pays an income-based percentage of their gross salary. Family members without their own income are insured free of charge. People who earn little or do not work pay less or nothing. This creates universal access to basic care. As a result, however, healthy high earners systematically pay more than their benefits cost.

This income-based contribution is limited by the Beitragsbemessungsgrenze. Income above this ceiling does not raise the contribution any further. This is where the redistribution between members ends, because very high incomes are not charged more than incomes exactly at the ceiling.

The solidarity principle also means that statutory health insurance has no individual ageing reserves. In old age, contributions rise with the spending level of the whole community of insured people, not with the life expectancy of the individual.

The opposite principle in private health insurance is the equivalence principle. The premium depends on the individual risk of the insured person. Age, gender (until gender-specific plans were abolished in the EU in 2012) and state of health at the time of application determine the premium. In statutory health insurance, people who earn a lot pay more, regardless of whether they use the benefits.

For high earners in good health, this means a premium that matches their risk. With a favorable entry age, it is often lower than the contribution to statutory health insurance.

The solidarity principle works well in a young society with rising wages. Demographic change in Germany, with more older and fewer younger contributors, increases the financial pressure on the statutory system.

When you compare statutory and private health insurance, we recommend that you look not only at today's contribution or premium but also at the long-term cost logic. The solidarity principle has advantages and disadvantages, and their weight differs depending on your personal situation.