Health insurance in Austria
Health insurance in Austria is characterized by two complementary forms of organization:
Health insurance in Austria is characterized by two complementary forms of organization:
On the one hand, there is statutory social security system, which comprises compulsory statutory insurance, and private health insurance, on a voluntary basis, on the other hand.
1. Relationship between statutory and private health insurance
Statutory social security constitutes a compulsory insurance coverage for nearly all types of occupations, independent of the level of income. Approximately 99% of the Austrian population are protected by statutory health insurance. The obligation to have insurance coverage is linked to the gainful activity.
Since the individual insured person has no right to choose between a statutory or a private health insurance, private health insurance in Austria is taken out, nearly without exception, to complement the statutory health insurance.
In the framework of amending the social-insurance legislation, all persons operating under a contract for work are subject to compulsory insurance coverage, when their work exceeds a certain amount, or if they work for one specific employer for a certain period of time. This amendment was made with a view to slightly alleviate the financially tight situation of the social-insurance institutions.
2. Obligation to Become Insured
In the framework of statutory health insurance, all gainfully active persons must become insured, while private health-insurance policies are taken out on the basis of a voluntary agreement.
3. Principles for Contribution Payments
Social security is funded by "social-insurance contributions" which are paid both by employers and employees, in the case of employed persons, and which self-employed persons must pay in full for themselves. The level of the contributions depends on the specific income of the insured person:
Rate of contributions
| Worker | Employee |
Health Insurance | 7,65 % | 7,65 % |
Accident Insurance | 1,4 % | 1,4 % |
Pension Insurance | 22,8 % | 22,8 % |
A statutory "maximum contribution basis" puts a ceiling on the salaries/wages used for the calculation of the contributions, namely € 4.020,--.
The dependents of an insured person also enjoy insurance coverage, without this having any effect on the amount of contributions paid to the statutory health-insurance scheme.
In contrast to the contributions established by law for the statutory health-insurance scheme, the insurance relationship under a private health-insurance scheme is determined by freely agreed contracts, premiums are calculated in accordance with actuarial criteria, depending on the risk in question, as well as the age, health status and sex of the insured person.
4. Benefits
Under the statutory health-insurance scheme, the obligation to provide benefits encompasses treatments for illness and after accidents of any kind. They consist of benefits in kind (treatment in case of illness = medical assistance by contracted physicians), hospital care, if necessary also the transport to/from the hospital, medical care of patients at home, maternity (care in a hospital + maternity stations), dental treatment, dental prosthesis, preventive health-checks for the early detection of diseases, and rehabilitation measures, as well as benefits in cash in the form of a daily compensation, if the person is not entitled to continued pay, or 50% of the daily compensation if a person continues to receive 50% of his/her pay, within the statutory framework.
In view of the high percentage of persons with social-insurance coverage among the Austrian population, private health insurers are responsible for providing access to physicians that have no contractual relationship with the respective statutory social-insurance institution, or for covering the costs of more comfort in the special class of the hospital in question, or in a private hospital.
5. Organization of the Social-Insurance System
The social-insurance institutions do not fulfil their tasks in the form of state-run administrative bodies but are decentralized institutions, based on the self-management model.The Central Association of Social-Insurance Institutions coordinates the self-management of the different social-insurance institutions. Membership in a social-insurance institution depends on occupational or regional criteria.
While the statutory health-insurance scheme pursues objectives of a social-policy nature and guarantees a basic insurance coverage for the broadest possible spectre of the population, private health-insurance serves primarily to secure the additional, individual interests of the insured persons, and also of companies, since group health-insurance contributes quite considerably to a company's provident measures for protecting the health of its staff.
Private Health Insurance
Private health-insurance is offered in two main forms, i.e. insurance of hospital costs and insurance of daily benefits. The benefits depend on the rate selected in every individual case.
Health insurers use many different rate systems and differ in their general insurance conditions.
There are no longer any model conditions for the Austrian market.
On account of a 1994 amendment of the law on insurance contracts, important provisions, which had formerly been governed by the general insurance conditions, for the first time became specific provisions, applying to health insurance contracts, of the law on insurance contracts:
Health-insruance contracts are designed as a "life-long contractual relationship" - with the exception of group policies, the insurance of daily compensation and the insurance of dental care, so that the insurer is prevented from imposing any limitations and does not have a right to terminate a relationship.
Since insurance rates no longer need approval, and since insurance contracts are for the whole life of the insured person, adjustment factors had to be found that are neutral and can be reviewed.
The following are criteria for adjustment:
1. an agreed index
2. an increase in the average life expectancy of the person insured at a specific rate
3. the frequency of resorting to benefits and their expense, in relation to the insured persons in the rate bracket
4. cost increases of the social-insurance providers
5. changes in the health system.
Health insurers are required to accumulate provisions for ageing in order to prevent that the higher incidence of disease in old age, when people often have lower incomes, leads to an increase in premiums, in relation to the risk. For this reason, the premiums paid by younger insured persons is higher (Ø 10%) than corresponds to their risk.
The provisions accumulated over the years provide a cushion which can be used, together with the additional premiums, to refund the rising costs of illnesses.
If the costs of the health system were to remain the same - which is not the case - there would be no increase in premiums, due to advanced age.
As a matter of principle, insurance coverage comprises the treatment of diseases that appear during the term of the insurance contract, unless there are agreements of a different nature. There is usually a waiting time at the beginning of a contract, which means that for diseases treated during this period, until the end of the treatment for this disease, there is no insurance cover. As a rule, there is no waiting time in case of accidents and certain infectious diseases. So, the full scope of the insurance coverage becomes effective only after the waiting time has expired (minimum 3 months, special waiting times of 6 months or 12 months).
A specific feature is that premiums may be refunded to the insured persons, or that they may share in the profits, at certain premium rates, if no insurance benefits are claimed during a certain period of time.
8 insurance companies, having their head offices in Austria, offer health insurance, of which 7 offer insurance of hospital costs, 8 insurance of daily benefits, 5 companies offer insurance of daily compensations, 5 insurers offer insurance of dental costs and 3 insure nursing costs.
As was expected, the premium income of health insurers went up by 3,5% in 2008, as compared to 2007, to € 1,535 bill. During that period, the volume of benefits went up by 2,2% to € 1,047 bill.
For further information please have a look at our annual report: www.vvo.at/jahresbericht
As a rule, the insurance policies taken out for private health insurance contain an insurance element for hospital costs. Under this type of insurance coverage, the costs for staying at a hospital, the treatment costs and the expenses for materials at the hospital are refunded.
This type of health insurance is a common form of complementary insurance, except for those cases where there is no statutory social-insurance protection.
It serves to refund the additional costs incurred when staying at the special class of a hospital and thus offers an additional quality of the service (free choice of physician, more comfortable equipment of the rooms, fewer beds per room, unlimited visiting hours, choice of meals, etc.), as compared to that offered by the statutory social insurance.
Since the different social-insurance institutions offer different benefits for stays in hospitals, and since hospital costs also vary on a regional basis, the premiums differ according to region and according to the social-insurance institutions responsible for the respective professional group.
On the basis of "agreements on payments and expenses", the insurer does not pay the benefits directly to the insured person but to the hospital/physician, if a guarantee for the costs has been provided to the hospital.
In case of hospitals with which the insurance company has a contractual agreement to that effect, the insurer provides the guarantee to pay the total additional costs incurred by staying in special class.
Costs and fees under such agreements are paid directly to the contracting party, in the framework of a statement upon admission to the hospital that the costs will be accepted. It depends on what the patient owes to the contracting party, i.e. the private insurance company (hospital/physician), on account of the treatment bill and on what is covered by the insurance policy.
The full guarantee to cover costs applies to all hospitals and day-clinics with which an agreement has been entered. The insurers issue lists of all those contractually committed hospitals and day-clinics where there is a full guarantee of cost coverage.
This type of insurance is also offered as group insurance.
Up to 1996, private insurers offering complementary coverage for hospital costs did not only have to pay the actually incurred additonal services in special class and the fees of private physicians, but in most federal provinces also again considerable parts of the standard-rate hospital class, which the insured person actually previously financed with his/her taxes and social-insurance contributions.
In its decision, the Austrian Constitutional Court established in connection with the public hospitals in Upper Austria that, in the future, patients in special class must only be invoiced the actually incurred additional costs for special class.
Insurance of daily benefits
Insurance of daily benefits is an insurance of fixed sums. The insurance policy stipulates a certain amount which is paid for every day spent at hospital, without requiring any proof of the expenses.
Under this insurance, daily benefits are paid for stays in the special hospital class or in the standard-rate class. This type of insurance can either be taken out independently or in addition to another type of health insurance.
Insurance of Costs for Out-Patient Medical Treatment
This type of insurance may be taken out in connection with an insurance of hospital costs but also separately.
This type of insurance is taken out by persons without social insurance or by persons with social insurance who do not want to consult contracted physicians or not only such physicians, or by persons where the social insurance institution does not accept the full costs of an out-patient treatment.
Special Forms:
Insurance of daily benefits is an insurance of fixed sums.
After the agreed waiting period, a certain amount in cash is made available for every day of a 100%-incapacity to work caused by disease.
Insurance for Trips Abroad:
Is taken out for a certain period of time, where a certain percentage of the documented out-patient or in-patient treatment abroad is refunded, up to a certain maximum amount.
Persons with private health-insurance will first pay for the services of established physicians, just like private patients, will then present the invoice to the insurer and receive a refund according to the applicable rate.
Framework Agreements for Out-Patient Services
In three federal provinces (Styria, Carinthia, Burgenland) the private health insurers have entered into framework agreements with the respectively competent chambers of physicians regarding the established physicians on the direct payments of doctors´ fees for out-patient surgical interventions – not for the other services.
Pharmaceutical Products
Persons with private health-insurance must first pay any prescribed medicines. Only then, the confirmed invoice for the medicines can be presented to the respective insurer who will refund the costs depending on the insurance rate.
Just like statutory health insurance, private health insurance is also affected by the constantly rising costs of health benefits. Being a voluntary complementary insurance – it is most unlikely to expect a fundamental change in the distribution of tasks between social insurance and private health-insurance - it must take cost-dampening measures, much more so than the social-insurance institutions.
Private health insurers consider it to be one of the most effective means to reduce costs if there is a shift of health services from the in-patient to the less costly out-patient sector, by means of an appropriate design of their rates, as well as more agreement with suppliers of out-patient health services, and other incentives.
The private health insurers take a basically positive approach to the performance-oriented hospital financing system (LKF) . They think that the new system offers an opportunity for implementing more rapidly the aforementioned decision of the Austrian Constitutional Court in the direction of a fairer financing of the special class:
All services to be provided under the principle of equality must be refunded from the several funds, while the users of special class pay for the services provided in special class and the doctor´s fee.
However, the issue of integrating the private health insurers into the envisaged LKF system does not arise, since the new financing system will have to cover all those services that must be provided for every patient, irrespective of the type of rate. Even under the new LKF system, the private health insurers will also accept only those costs that are actually incurred by additional services. In connection with fees in special class, the introduction of an LFK will not have any immediate impact on private health insurers. The question of quality assurance – also for the medical sector – will, however, take on much more significance than to date.
Fiscal Treatment of Private Health Insurance
The premiums paid for private health-insurance policies are calculated by means of actuarial methods.They depend on the agreed benefits, the age at entry and the sex of the insured person, and are subject to an insurance tax in the amount of 1%.
All premiums for private health-insurance – independent of the type of health-insurance policy – can be deducted as special expenses from a person´s tax payments, and they reduce the taxable income. However, the premiums paid for private health-insurance contracts are put together with the other special expenses. The total amount that can deducted as special expenses every year is limited to € 2.920,-- for the taxpayer and the not gainfully active spouse (as well as another € 1.460,-- for a minimum of three children who, in turn, do not claim special expenses).
Up to the aforementioned ceiling, 25% of the documented special expenses reduce the tax burden. As of 1996, the possibility to deduct health-insurance payments was totally eliminated for a taxable annual income of € 50.900,--. For incomes between
€ 36.400,-- and € 50.900,-- the deductibility is reduced on a linear scale.
As a matter of principle, private health-insurance benefits are exempt from income tax, independent of whether the benefits are received for the treatment of a disease or as daily benefits (Status: 2008).
Dr. Ulrike Braumüller
Managing Director, Personal Insurance
Austrian Insurance Association
Schwarzenbergplatz 7
1030 Vienna, Austria
Phone: + 43/1/711 56 - 234
Fax: +43/1/711 56 – 271
E-Mail:
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