Statutory Health Insurance (Gesetzliche Krankenversicherung, GKV)
Statutory health insurance is Germany's solidarity-based compulsory branch of social insurance providing medical care for the majority of the population.
Concept
Statutory health insurance (GKV) is one of the five branches of Germany’s social insurance system and secures basic medical care for the majority of the population; it is based on the solidarity principle, under which members’ contributions are assessed not according to individual risk but according to contributable income.
Organization and Financing
The GKV is organized through a large number of statutory health insurance funds, among which insured persons generally have free choice; financing is provided through income-based contributions split between employer and employee, distributed to the individual health insurance funds via the health fund based on the morbidity-oriented risk structure compensation scheme to offset differences in the risk profile of their respective insured populations.
Compulsory Insurance and Distinction from Private Health Insurance
Most of the population is subject to a statutory obligation to be insured under the GKV, from which only certain groups, particularly civil servants, the self-employed, and employees above the compulsory insurance threshold, are wholly or partly exempt and can instead switch to private health insurance; the fundamentally different financing principles of the GKV (solidarity principle, pay-as-you-go) and private health insurance (equivalence principle, funded system) shape the dual structure of the German health insurance system.