How do insured perceive their financial security in the event of illness?--a panel data analysis for Germany

There is a lack of research regarding the subjective perception of financial security in the event of illness of insured persons. Therefore, the aim of our study was to analyze the subjective perception of financial security in the event of illness in the German setting over time and to identify major determinants of that perception.

We applied a probit-adapted ordinary least squares estimation procedure including fixed effects to a balanced data set from the German Socio-Economic Panel. After correcting our data set, we included approximately 23,500 observations in our analyses.

We show that higher income and the existence of private health insurance have a positive and significant impact on the perception of financial security. Furthermore, private supplementary health insurance has a positive and significant effect on this perception; however, this is solely true for policies that cover special features during hospital stays. Experience with the health care system is also positively related to the individual's perception. Finally, our regression results illustrate that the overall perception is declining over time.

The results indicate that political decision makers are facing challenges regarding the declining subjective perception in the German health care system. Because of the positive correlation between experience and subjective perception, it can be assumed that the health care system and especially statutory health insurance are better than their presentation in the media. Hence, there is a problem of communication and information, and political decision makers face challenges in presenting the system objectively and handling the media in a proper way.