Health Policies: Germany (2015)

Introduction

The German healthcare system was the first universal healthcare system (Obermann et al. 2012), providing comprehensive healthcare for all. It was established at the national level in 1883 by Otto von Bismarck and its key principles are solidarity, subsidiarity, and corporatism (Green & Irvine 2001). Solidarity refers to the government’s responsibility to ensure universal access to healthcare when needed. Subsidiarity suggests a decentralised system in which the government provides the legislative framework to be implemented by the smallest administrative unit. Corporatism stands for a democratically-elected representation of employees, employers, and professional associations as well as national and regional representatives on the governing board of insurance funds (ibid.). The healthcare system is, thus, regulated by a public health organisation authorised to make binding regulations and decisions regarding healthcare.

As of 2009, it is compulsory for all German citizens and long-term residents to have health insurance. The healthcare system is divided between statutory and private schemes. For those earning less than approximately 50,000€ per year, insurance is provided by the public statutory health insurance scheme (ibid.). About 90 % of the population is covered by statutory health insurance (Obermann et al. 2012). Anyone earning over the threshold has the option of purchasing a private health insurance policy (Green & Irvine 2001). As health insurance is mandatory, applicants cannot be denied by statutory or private insurance funds. Since 1990, Germans are free to choose their insurance funds and to switch providers once every twelve month (ibid.).

The funding of the healthcare system is ensured by a statutory contribution system through health insurance funds. Payments to insurance funds are based on a percentage of income. Currently, the total percentage of contribution amounts to around 15 % of the gross salary. Previously, contributions were shared equally between employees and employers. However, due to a reform in 2011, the employer’s contribution is frozen at a share of 7.3 %. The reform was carried out in light of rising healthcare expenditures. There is steady growth in healthcare expenditure due to demographic changes and medical cost inflation (Obermann et al. 2012). As society is ageing, the proportion of people working, and thus contributing, is shrinking, while the demand for healthcare is increasing. Additionally, progress in medical technology and pharmaceuticals lead to higher expenditures. Since 1970, there has been a series of reforms aimed at facing the unbalance of an erosion of revenues and rising expenses (ibid.). Several laws were enacted in order to contain expenditure growth, including income-oriented expenditure policies, reference prices for pharmaceuticals, restrictions on high-cost equipment and treatments, limits on the total number of physicians, and co-payment regulations (ibid.).  

Long-term care

Any person with significant need for continuing nursing and household assistance in daily life is entitled to long-term care, irrespective of age, income, or wealth (Schulz 2010). In legal terms, the entitlement to long-term care refers to individuals with physical or mental disabilities requiring substantial assistance for a minimum period of six months. 

Since January 1995, long-term care is covered by a universal governmental insurance scheme which was introduced under the government of Helmut Kohl. Contribution is mandatory for the whole population. Usually it is carried out by the same insurance fund that is in charge of the individual’s health insurance (Green & Irvine 2001). Similar to health insurance, long-term care contributions are split between employers and employees. The contribution rate is set by law and is automatically deducted from the gross salary. Currently, it amounts to a combined rate of about 2 % of the gross salary. Childless people above the age of 23 pay an additional premium.

Long-term insurance benefits, however, are only provided to people insured for at least two years. The degree of need determines which benefits are received. Three care categories have been established by law to distinguish the level of dependency on long-term care and the amount of benefits needed (Schulz 2010). If there is need of care below the required threshold of the lowest of these levels, there is no entitlement to long-term care benefits.

There are various forms of long-term care offered according to German legislation and beneficiaries may choose among different forms (ibid.). Benefits are received in cash or in-kind, for either home care or institutional care in nursing homes (ibid.). Cash benefits give patients the freedom to choose their own provisions of care, for example, through care by relatives. However, most providers of long-term care are private, non-profit organisations frequently affiliated with religious or charitable groups (ibid.). 
Given the limits of governmental long-term care insurance benefits, citizens are encouraged to purchase supplementary long-term care packages offered by private health insurance companies (Green & Irvine 2001).

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