Germany has a multi-payer health insurance system, initially established in 1883 under Otto Van-Bismarck. It ensures universal coverage as all citizens are required by law to purchase health insurance. This applies to foreign students, workers, researchers and even refugees, with each group unable to enter Germany unless they are insured. The German healthcare system differs greatly from the NHS in the UK as citizens in Germany are given far more flexibility when it comes to selecting their providers and doctors; this isn’t the case in the NHS, as patients are allocated doctors by administrators, unable to choose those who provide better care. As of 2018, Germany’s health expenditure as a percentage of GDP is 11.2%. There are many benefits that the German healthcare system has over other Western nations, notably the vast choice for consumers alongside the better quality of the healthcare services provided.
Public health insurance
Germany’s health insurance is split into two sections: public and private health insurance. Those who make under €64,350 per year are automatically enrolled into the public health insurance system. All citizens who are part of this scheme receive the same medical care regardless of income, achieved through an income-based common fund. Germans are mandated to pay 7.3% of their annual salary to this health insurance plan, with their employer funding an additional 7.3% to a total of 13.6%. This figure rises to 8% (16% in total) for higher earners, however, contributions are capped at €683 a month. For example, if someone has an annual salary of $50,000, $3,750 must be allocated towards the healthcare fund. Employers are also required to contribute 3.05% of the employees’ salary towards nursing care insurance, which is equally paid for by both the employer and the employee. Students only need to pay $106.93 monthly to have access to the public health insurance system, however, they can opt out.
One of the major benefits of the German healthcare system is that employees get to choose their providers. There are over 100 non-profit insurance providers, with each provider offering different perks and benefits. Providers pay for the contributions and payout claims from doctors and medical facilities when one of their insured members use them. The most popular fund, Techniker Krankenkasse (TK), has over a million members, whereas other smaller funds only insure thousands of citizens. Employees must notify their employers when they want to change providers, which can take place 18 months after the first contributions were made.
TK is by far the biggest public health insurance in Germany. Alongside the essentials, TK provides dental appointments and comprehensive sickness insurance; both of which aren’t offered by many providers. Their insurance plan encourages members to be healthy, through fitness and nutrition classes that members can attend either for free or at a lower cost.
With this said, all providers in Germany let those insured choose their doctors and medical centres. This creates competition between the various firms who run hospitals in Germany, to provide the best service at the lowest cost – something that is much needed in the NHS. This competition also reduces waiting times, as hospital providers with the lowest waiting times have more customers and thus more revenue. In 2016, Germany had waiting times that were far lower than that of the UK, with only 25% of people having to wait over a month for specialist care. This figure was at 41% in the UK.
Private health insurance
Those who are self-employed or earn over $64,350 (as of 2021) can opt-out of public health insurance. The same is true for students aged between 23-30, although this is much rarer. Private healthcare insurance premiums vary depending on the individual’s age and health, as is the case in the UK. However, the clear difference between the two systems is that those who opt for private health insurance in Germany are not mandated to pay for public health insurance. In the UK, regardless of whether you choose to go private, you cannot opt-out of taxes that go towards the NHS.
The German healthcare system is both efficient and of good quality. This is unsurprising given the competition ingrained in the system, as both insurance firms and hospital providers compete to provide the most coverage and care at the lowest cost. It takes the best of both the fully regulated NHS healthcare market and the largely deregulated American market by ensuring that all citizens are insured whilst not sacrificing quality in the process.