History

Social safeguards in case of illness have a long tradition. The Health Insurance Act of 1883 introduced compulsory insurance for industrial workers. With this act, insured persons were henceforth legally entitled to benefits-in-kind, such as free medical treatment and medications, and cash benefits, such as sickness benefit and death benefit. The health insurance funds were allowed to expand their services within the scope of their articles, and to extend health insurance coverage to family members of the insured. The statutory regulation of contribution rates based on gross income also originated in this era.

The Reich Insurance Code of 1911 systematised health, pension and accident insurance, integrating them under one set of laws. The health insurance law set down in the Reich Insurance Code (RVO) went into effect in 1914. Up until the enactment of the Health Care Reform Act of 1989, the RVO was the decisive legal basis for health insurance law. The RVO extended compulsory insurance to messengers, migrant workers, and those working in farming and forestry.

Under the rule of National Socialism, the organisation, financing and supervision of the health insurance funds were altered dramatically. Self-administration was abolished and state-approved directors were assigned to each fund. One of the essential reforms that did take place in this era was the introduction of health insurance for pensioners in 1941.

After the founding of the Federal Republic of Germany, self-administration was reinstated in 1952. The Act on Continued Payment of Wages of 1969 established that blue-collar and white-collar (salaried) workers were to be treated equally in terms of continued remuneration in case of illness.

In the 70s the general economic upswing was reflected in several changes in health insurance law. These included the Improved Benefits Act and the Rehabilitation Act of 1974. Also during this period, the group of insured persons was expanded to include self-employed farmers, students, disabled persons in sheltered institutions, as well as artists and those in the publishing professions.

With the expansion of the circle of the compulsorily insured, the amount spent on benefits by the statutory health insurance funds also rose accordingly. A series of cost containment laws were enacted in the years 1977 to 1983 in an effort to keep spiralling costs under control.

The Health Care Reform Act of 1 January 1989 was incorporated as Book V of the Social Code. Among the key reforms instituted were benefits for health promotion, early detection of disease, benefits for severe need of care and reimbursement of costs for orthodontic treatment.

German reunification in 1990 posed a great challenge to the statutory health insurance funds. The unification treaty ruled that federal German health insurance law was to apply to the new east German Länder as well as of 1 January 1991.

On 1 January 1993 the Health Care Structure Act came into effect, at the heart of which was an organisational overhaul of the statutory health insurance system. The aim was to preserve the subdivision of the insurance system while providing for greater fairness in contribution rates and more competition between the health insurance funds. Some of the most important reforms were the institution of free choice among health insurance funds for all members starting in 1996, as well as risk structure compensation.

In 1995 the establishment of statutory long-term care insurance  added the fifth important branch to statutory social insurance, closing a large gap in social security. Around 80 million people in the Federal Republic of Germany were able for the first time to rely on insurance protection in case they ever needed long-term care.

When the Contribution Relief Act went into effect on 1 January 1997, followed by the 1st and 2nd Statutory Health Insurance Reform Acts of 1 July 1997, the third phase of health care reform was initiated, which, among other things, grants the right to terminate an employment relationship in exceptional cases, and gives the health insurance funds and the associations of doctors accredited by statutory health insurance (kassenärztliche Vereinigungen) more freedom with regard to their organisation and provision of benefits, for example in the form of model projects, etc.

Since 2000 further diverse acts to reform statutory health insurance went into effect. They aimed to make health care more economical while ensuring more uniform quality standards. The new laws addressed areas such as encouraging a greater focus on family practitioners, implementing quality management, reforming the financing system for hospital care, as well as diverse individual measures regulating membership, contributions and organization structure.