As President Obama unveils his proposals for health care reform in America, a court in Germany confirmed on Wednesday that private insurers must accept all applicants, regardless of age or health status. The court also imposed limits on what the companies could charge for insurance.

The ruling of the Karlsruhe-based Constitutional Court represents a big victory for the Berlin government which had pushed through the health reform in 2007. The industry had challenged the constitutionality of the reform, arguing it would “destroy” their business model.

Health minister Ulla Schmidt, photo, welcomed the decision, saying the ruling confirmed that the reform does not violate the constitution.

“Above all, it is now clear that private insurers, too, have a social responsibility,” she said. “Everyone in Germany must be protected by health insurance, and older people must be protected against high premiums.”

Challenging the reform was a group of private insurers, including Deutsche Krankenversichrung (DK), Victoria, AXA and Süddeutsche Krankenversicherung.

Privately insured persons currently pay €570 per month, and according to the 2007 law, the premium cannot be higher than the average highest premium charged by the publicly supported health insurance system. Private health insurers are also required to accept all applicants, regardless of age or health condition.

More than eight million people in Germany, about 10 percent of the population, are covered by private health insurance. The vast majority belongs to over 200 non-profit health funds, or Krankenkassen, which are paid for by individual and employer contributions.

The judges disagreed with the private insurers’ arguments and said the health care reform law would not harm “the efficiency of private insurance in the future.”

The ruling means that many privately insured Germans can switch to the lower basic premium, or Basistarif, from more expensive insurance plans.

Schmidt had argued before the court that the reform was necessary because the private health insurers had been signing up young, health and well-paid members, which raised treatment costs for the public portion of the system.

In challenging the reform, the companies focused mainly on the basic premium, the key element of the reform. The ruling means they now  must offer the cheaper rate to everybody without prior medical checkups.

The companies had argued that their customers’ premiums would rise if those paying the Basistarif were subsidized by the other privately insured premium holders.

But the judges ruled that the benefits available under the basic premium were not especially attractive for the average privately insured person. Therefore, mass defections to the lower premiums would be unlikely, they said.

Agencies/The Local/germerica