The following extract was written in German and translated into English using Google Translate from Wikipedia.
The Risk Structure Compensation (RSA) is a financial compensation mechanism in social health insurance systems with freedom of choice between health insurance companies. In order to reduce the problem of risk selection, either health insurers with a “good” risk structure of their policyholders pay compensation payments to insurers with a “bad” risk structure, or those with the “good” risk structure receive lower allocations from a central body than those with a “bad” risk structure. In the German statutory health insurance (GKV), a risk structure compensation has been introduced since 1994.
In the years 2000 and 2001, a decision of the German Bundestag in connection with the 2000 health reform was prepared by IGES/Cassel/J. Wasem for the Federal Ministry of Health with an inventory and proposals for the further development of the RSA. At the same time, K. Lauterbach/E. Wille prepared an expert opinion for the umbrella associations of health insurance companies. From the proposals in both reports, the expert groups developed a joint consensus paper, from which the ministry developed a draft law for an RSA reform; the law came into force on 1 January 2002.