The Private Health Insurance: Demarketization of a Welfare Market?(Essay‪)‬

1 Introduction The German health care system with its coexistence of statutory and private health insurance (SHI/PHI) is characterized by a peculiarity, which differs substantially from other European health care systems. However, this peculiarity results less from the general existence of private health insurances, but rather from its substitutive character. Therefore, the PHI is not only suitable as supplementary insurance but also as a substitute full-cover of SHI. In spite of this substitutive function, many fundamental differences exist between these systems. The past years have witnessed a tendency of convergence of PHI and SHI systems. In the SHI, a development of marketization took place, whereas the PHI faced a growing influence of regulatory state intervention. While changes in the SHI--due to their relevance for a predominant part of the population--are often analyzed in detail, reforms of PHI normally play a subordinate role. This article will focus on recent developments of Germany's private health insurance and tries to analyze, if this process can be described as "demarketization" of a welfare market.