Leslie Massey
Austria's system financing costs are highly fragmented, with a complex network of pooled funds and transfers between the tax system and the SHI system. The financing of the Austrian health system is shared between three governmental levels: the federal government, nine state governments, and 2,102 municipalities. The health system is financed by a mix of general tax revenues and compulsory social health insurance (SHI) contributions, with income-related SHI contributions accounting for about 60% of publicly financed health expenditures, and the remaining 40% coming from general taxation. SHI contributions are based on income and are nearly equally shared between employers and employees. Austria's financing costs also include out-of-pocket (OOP) payments, which accounted for 18% of total health spending in 2019, above the EU average of 15%.
| Characteristics | Values |
|---|---|
| Health expenditure from public sources | 75% of the total in 2019 |
| Out-of-pocket (OOP) payments | 18% of total health spending in 2019 |
| SHI funds finance | 45% in 2018 |
| Direct government spending | 30% |
| SHI contribution rate | 7.65% of employment-based income in 2017 |
| Employer contribution rate | 3.87% of income |
| Employee contribution rate | 3.78% of income |
| Civil servant contribution rate | 7.635% |
| Pensioner contribution rate | 5.1% |
| University tuition fees for Austrian and EU/EEA students | Free |
| University tuition fees for students not completing a degree in a timely fashion | €363 per semester |
| Austrian Student Union (ÖH) fee | €22 per semester |
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What You'll Learn
Health insurance contributions
Health insurance is mandatory in Austria, and the country is considered to have one of the best health insurance systems in the world, with nearly 99% of residents covered. The health system is financed by a mix of general tax revenues and compulsory social health insurance (SHI) contributions.
Social Health Insurance (SHI) Contributions
SHI contributions are based on income, not health risks. The contribution rate is determined by law and can only be changed by the Austrian Parliament. In 2017, the contribution rate was 7.65% of employment-based income, or the contribution base, for the majority of the contributing population. The rate is nearly equally shared between employers and employees: 50.6% (3.87% of income) is paid by the employer, and 49.4% (3.78% of income) by the employee. Lower contribution rates apply to civil servants (7.635%) and pensioners (5.1%). SHI contributions for certain population groups, such as the unemployed, are financed from general tax revenues. Employers pay SHI contributions, including both the employers' and employees' share, to one of the 18 SHI funds.
In 2018, SHI funds financed the largest share of health expenditure (45%), while direct government spending, mostly contributions by states for inpatient care, constituted a large share (30%). In 2020, a major reform merged the existing SHI funds into five funds. The Österreichische Gesundheitskasse (ÖGK) covers about 82% of the insured population, while self-employed workers, farmers, civil servants, and railway workers are insured by two specialist SHI funds.
Voluntary Health Insurance
Voluntary health insurance is also an option in Austria. For example, private supplementary insurance depends on additional benefits, age, and overall health, costing around €45 to €85 per month for adults and €30 per month for children. If you don't have an income, statutory health insurance in Austria costs €495.58 per month, as of 2024.
Health Insurance for Foreigners
If you are staying in Austria for more than six months, you are considered a resident and must pay contributions to one of the local insurance institutions (Sozialversicherungsträger). You will then receive an e-card, which provides access to free healthcare in the country. Foreign students can continue to use their existing health insurance plan but will need a European Health Insurance Card (EHIC). The EHIC allows cardholders to access state-provided healthcare at a reduced cost or for free.
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Out-of-pocket payments
- Type 1: An individual is not covered by a prepaid plan and has to pay the total healthcare bill directly.
- Type 2: A prepaid plan exists, but parts of the healthcare services offered are excluded and must be paid out of pocket.
- Type 3: Healthcare services are included in the prepaid plan, but the costs are not fully financed by the plan, leading to partial cost-sharing.
In Austria, only types 2 and 3 are of relevance. OOPP in Austria include co-payments for hospital stays, services from non-contracted providers, and prescription medicines. The level of user charges varies by SHI fund, and exemption mechanisms exist for poorer households. OOPP are regressive, with results differing across income brackets. They have undesirable effects from an equity perspective, indicating a high degree of reranking and horizontal inequity.
OOPP spending in Austria is primarily on outpatient medical care, medicines, long-term care, and dental care. In 2019, OOPP accounted for 18% of total health spending, above the EU average of 15%. Income-related SHI contributions and general taxes finance the majority of Austria's health system. SHI contributions are based on income, with rates determined by law and subject to change only by the Austrian Parliament. The contribution rate in 2017 was 7.65% of employment-based income, shared almost equally between employers and employees. Lower rates apply to civil servants and pensioners. SHI funds collect contributions independently, and employers pay their share to one of the 18 SHI funds.
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Government spending
The federal government plays a crucial role in financing healthcare through general tax revenues and compulsory social health insurance (SHI) contributions. SHI funds, with nearly universal coverage, receive revenues from various sources. These include contributions from the federal government for specific groups, reimbursements from services administered through SHI but financed by other payers, and the Interregional Equalization Fund. In 2018, SHI funds financed approximately 45% of health expenditure, with contribution rates determined by law and modifiable only by the Austrian Parliament.
The federal government collects taxes, including value-added tax (VAT), income tax, and tobacco tax, and distributes them through financial equalization mechanisms to three administrative levels: the federal government, nine state governments, and 2102 municipalities. This fragmented financing system is regulated by agreements under Article 15a of the Federal Constitutional Law and the Financial Equalization Act.
In addition to health spending, the Austrian government provides financial support in other areas, such as education. Austrian universities offer free tuition to Austrian, EU/EEA students, and students from other nationalities who complete their degrees within the minimum duration. The government also offers various grants, scholarships, and housing assistance to students. These grants cover expenses like fees, transportation, child support, insurance, and other costs, ensuring accessibility to higher education.
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Private health insurance
The cost of private health insurance in Austria is typically higher than that of public insurance. The cost is determined by factors such as age, gender, and pre-existing conditions. For instance, a plan for children under 18 may cost around €30 a month, while the same plan for senior citizens about 65 can cost approximately €450-500 a month.
The financing of Austria's health system is complex, with a mix of funding sources including social health insurance (SHI) contributions, general tax revenues, and private insurance. SHI contributions are based on income and are nearly universal, covering 99.9% of the population. These contributions make up about 60% of publicly financed health expenditures, while the remaining 40% come from general taxation, including value-added tax (VAT), income tax, and tobacco tax. The federal government, nine state governments, and 2102 municipalities are responsible for financing healthcare through these tax revenues.
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Student grants and loans
Austria offers support for students who are at a financial disadvantage. Financially disadvantaged students have access to government student grants, and other support is also available from the Federal Ministry of Education, Science and Research (BMBWF). The Student Support Act sets out a range of possible funding sources for degree programme students from Austria and, in some cases, from elsewhere. All aid under the Student Support Act (except for merit-based awards and stipends) requires the student to be worthy of support based on their personal circumstances and to supply proof that they are successfully continuing to study. The Austrian Student Support Authority is responsible for allocating such aid and has set up Grants Desks (Stipendienstellen) at all major universities.
The Student Financial Support Act (Studienförderungsgesetz – StudFG) outlines the statutory study period for which students can apply for a study allowance or tuition fee grant. Applications for a study allowance can only be submitted within a certain period: for the winter semester, from 20 September to 15 December; and for the summer semester, from 20 February to 15 May. Applications are also accepted outside of these periods, but support will only be granted from the month of application and not retroactively from the start of the semester. The Student Financial Support Authority is responsible for processing applications for study allowances, handling appeals, and providing tuition fee grants and financial support for studies.
The Austrian National Union of Students (ÖH) can provide financial support from the ÖH Social Fund in some hardship cases. It can also provide students with information and support regarding accommodation and student halls of residence.
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Frequently asked questions
The Austrian health system is financed by a mix of general tax revenues and compulsory social health insurance (SHI) contributions. Income-related SHI contributions made up about 60% of publicly financed health expenditures, while the remaining 40% came from general taxation, including value-added tax (VAT), income tax, and tobacco tax.
SHI funds in Austria receive revenues from various sources, including contributions from employers and employees, federal government contributions for specific groups, reimbursements for services administered through SHI, and the Interregional Equalization Fund.
The contribution rates for SHI in Austria are based on income and are determined by law. These rates can only be changed by the Austrian Parliament. In 2017, the contribution rate was 7.65% of employment-based income, shared almost equally between employers and employees.
Out-of-pocket payments are a significant source of healthcare financing in Austria. In 2019, OOP spending accounted for 18% of total health spending, which is above the EU average of 15%. OOP spending covers areas like outpatient medical care, medicines, long-term care, and dental care.
