Most Germans Choose Public Insurance

It is the obligation of all Germans to have health insurance (see Original article: German M.D.s Largely Praise Country's Insurance System). All of those under a certain income level are required to be covered by public health insurance. Those above that income level, the self-employed, or public servants can either enroll in public insurance or buy private insurance. Today, some 85 percent of Germans have public health insurance; the remaining 15 percent have private health insurance.

The amount of money that has to be contributed to the public health-insurance system on behalf of each covered person constitutes about 14 percent of his or her wages. Half of the 14 percent is paid by the employee and the other half by the employer. The government pays for insurance for unemployed persons.

Private health insurance, in contrast, is paid for out-of-pocket. It is generally more expensive than public health insurance, but it also often provides additional benefits. Most Germans who have private health insurance are self-employed. But in the case of those who have employers, their employers still have to contribute 7 percent of their wages to their health insurance. But instead of the employers giving the 7 percent to the government, they give it to the employees, who can then apply it toward the purchase of private health insurance.

The public health-insurance system is composed of hundreds of nonprofit insurance companies called “sickness funds.” People can choose the sickness fund in which they want to enroll. Regardless of which fund they select, their sickness fund card will provide them with access to medical services anywhere in Germany.

Each year, associations of sickness funds negotiate agreements with associations of sickness-fund physicians as to the amount of money that physicians will receive from the funds. Private health-insurance companies generally pay physicians more than public sickness funds do.

By most countries' standards, the benefits provided under Germany's public health-insurance system are remarkably generous. However, because of rising health-care costs due to an aging population and intense use of advanced medical technology, some efforts are being made to reduce costs to the system.

For instance, co-pays for hospital stays, doctor visits, and prescription drugs are now required, and certain medical procedures are no longer reimbursed. The government is even trying to limit the number of prescriptions that physicians prescribe. The way it works is as follows: if physicians prescribe medications that cost more than the government has proscribed for their particular specialty per year, they must pay the excess out of their own pockets.

The money collected under the public and private health-insurance systems in Germany essentially underwrites the German health care system. The money also represents 11 percent of Germany's gross domestic product (GDP), compared to the 14 percent of GDP that is invested in health care in the United States.

So, why is health care in the United States more expensive than health care in Germany, especially since relatively fewer people have access to it? Are there perhaps more inefficiencies in the American health care system? Or are some stakeholders receiving more money in the United States than in Germany?“ Regarding the current [U.S.] presidential election debate about a new health-insurance system for the United States, it might be worthwhile answering this question,” one German psychiatrist suggested.