Germany’s health care system
From a recent report at NPR:
The health care system that took such good care of Sabina is not funded by government taxes. But it is compulsory. All German workers pay about 8 percent of their gross income to a nonprofit insurance company called a sickness fund. Their employers pay about the same amount. Workers can choose among 240 sickness funds.
Basing premiums on a percentage-of-salary means that the less people make, the less they have to pay. The more money they make, the more they pay. This principle is at the heart of the system. Germans call it “solidarity.” The idea is that everybody’s in it together, and nobody should be without health insurance.
“If I don’t make a lot of money, I don’t have to pay a lot of money for health insurance,” Sabina says. “But I have the same access to health care that someone who makes more money has.”
But she acknowledges that nearly 8 percent of her salary is a sizable bite.
“Yes, it’s expensive. You know, it’s a big chunk of your monthly income,” Sabina says. “But considering what you can get for it, it’s worth it.”
Actually, it’s about the same proportion of income that American workers pay, on average, if they get their health insurance through their job. The big difference is that U.S. employers pay far more, on average, than German employers do — 18 percent of each employee’s gross income versus around 8 percent in Germany.
As I’ve said before, I actually really like this system. People still pay for health care, have a great deal of choice, and the providers are non-profits but also not government entities. There’s competition, and it’s not as subject to regulatory capture as the American system has been, perhaps largely due to the fact that the sickness funds are non-profits. Everyone gets covered, and some people have access to private insurance, too. The system of payment is very progressive – much like a progressive tax, though again, the funds don’t go to the government, they go directly to the sickness fund, bypassing a lot of bureaucracy. More info here.
Why can’t this work in America? I’ve heard lots of reason, but I’m interested in commenters’ views…
See also: Singapore.