Risk Structure Compensation (Morbi-RSA): Has the 2020 Reform Truly Created Fair Competition?
If you are trying to understand the complex world of German public health insurance (Gesetzliche Krankenversicherung, or GKV), you have likely encountered the term Morbi-RSA—the morbidity-oriented risk adjustment scheme. This crucial financial mechanism within Germany's healthcare system has been a source of controversy for years. Criticized for its vulnerability to fraud and, more importantly, for creating unfair competition between health funds, it underwent a significant reform in 2020 under then-Health Minister Jens Spahn. But did this reform achieve its goals? We spoke with Ulrike Elsner, Chairwoman of the Association of Substitute Health Funds (vdek), to get an insider's perspective.
The Core Problem: Massive Financial Redistribution
In the past, the vdek and other associations pointed to significant misallocations within the Morbi-RSA, leading to a massive redistribution of funds—primarily benefiting the Local Health Funds (AOKs) at the expense of Substitute Funds (Ersatzkassen).
"Indeed, after the Morbi-RSA reform came into force in 2009, there were considerable competitive distortions within the statutory health insurance (GKV)," explains Elsner. "Since then, among the types of funds, the AOKs have shown a high over-coverage of their expenditures, and the Substitute Funds a clear under-coverage, which has continued to widen on both sides over the years."
The peak was reached in 2017. The AOKs had an over-coverage of 102.0%, meaning they received €1.347 billion more from the central health fund than needed to cover their claims costs. Conversely, the Substitute Funds had an under-coverage of 98.8%, leaving them €931 million short. Similar issues affected Company and Guild Health Funds (BKKs and IKKs), leading to an alliance calling for reform.
The 2020 Reform: Key Changes to Level the Playing Field
The distortions were so evident that the legislature passed the "Act for Fair Health Fund Competition" (GKV-FKG) in 2020. From the perspective of the Substitute Funds, the most important changes were:
| Reform Element | Purpose & Impact |
|---|---|
| Regional Component | Compensates for regional cost and care structure differences that were previously ignored, eliminating a major source of distortion between funds operating in different areas. |
| High-Risk Pool | Relieves funds of the extreme costs associated with very expensive treatments (e.g., new drug therapies) that far exceeded the old RSA's coverage limits. This protects funds from the financial shock of individual high-cost cases. |
| Elimination of Disability Pensioner Surcharges | Removed an outdated relic from the "old RSA" that unfairly disadvantaged funds with members who were not eligible for such pensions (e.g., retirees, non-working individuals, self-employed), creating a more level field. |
Has the Reform Worked? Assessing the Results
Since the reform took effect in April 2020, has there been a noticeable change?
"The reform... ensures more distributive justice and reduces competitively relevant over- and under-coverage between the types of funds," states Elsner. Data from 2021 and 2022 show a reduction in the under-coverage of BKKs, IKKs, and Ersatzkassen, while the very high over-coverage of the AOKs has also decreased.
However, Elsner cautions that the period since the reform is short, and fluctuations have been observed. "The Morbi-RSA is a learning system. Thus, it remains to be seen how the effects develop long-term and where the legislature may need to intervene again."
Ongoing Challenges and Future Outlook
While the financial redistribution has improved, significant structural challenges remain. Elsner points to a critical issue: "However, competitive distortions continue to exist due to different supervisory jurisdictions for the health funds."
Nationally operating funds are supervised by the Federal Office for Social Security (BAS), while regionally operating funds fall under various state authorities. This two-tiered supervisory structure leads to inconsistent regulatory practices, creating new competitive imbalances. The vdek advocates for consolidating supervisory authority at the federal level (BAS) to ensure neutrality and administrative efficiency.
Looking ahead, a comprehensive evaluation of the 2020 reform is expected in 2025. Until then, the vdek recommends a cautious approach: "It is not advisable to give recommendations for further RSA reforms before the completed Morbi-RSA reform and its effects have been fully examined." The focus should be on monitoring the current reform's impact and thoroughly analyzing upcoming expert reports.
Conclusion: Progress Made, But the Journey Isn't Over
From the vdek's viewpoint, the 2020 Morbi-RSA reform has undoubtedly led to fairer competition by addressing key financial flaws. The massive, systematic redistribution of funds has been curbed. However, the goal of a perfectly level playing field has not yet been fully achieved. Persistent issues like fragmented supervision continue to create distortions. For anyone navigating the German public health insurance system or studying healthcare financing models, the evolution of the Morbi-RSA remains a critical case study in balancing financial risk, equity, and competition within a complex social system.