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Health Insurance in Germany

It's Super Tuesday, so I thought I'd share a bit about healthcare in Germany, in the context of Medicare for All.

There has been much ado in the press and debates about the name "Medicare for All", "Medicare for All Who Want It", etc, but in general, I've felt that these all miss the core point: the USA needs universal, affordable health care.

We have that in Germany. It's not single-payer like the NHS in the UK, but it's universal, and it's affordable. Here's a quick rundown of how things work here.

The insurance system and costs

The German health care system is a bit complicated. In general, there are two spheres of normal medical insurance: public, and private. Which one you’re allowed (or required) to participate in depends on how you’re employed. All About Berlin has a great rundown of the costs and constraints for people emigrating here.

The abridged version is:

What it's like to be insured in the public system

For most health-related issues, I go to a "Hausarzt", which is basically a general practitioner similar to a primary care doctor, except you don't need to pick one -- you just show up in their office during open hours, give them your insurance card, and wait for them to call your name.

If you have a serious issue, it's usually best to go to the GP first, and they'll write you a referral to a specialist. Having a referral isn't required, but it usually helps you get an appointment with a specialist sooner than you would otherwise.

In most cases, when you visit the doctor, there is €0 out of pocket. No copay, nothing. In the very few cases where there is, it's almost always under €20.

In the past 5 years, I've been an inpatient in the hospital twice, and taken an ambulance from one hospital to another, completely across Berlin. There is a copay for staying in the hospital, but it's legally mandated, and approx. €10 per day. In these 5 years, including all doctors appointments, special medical procedures, hospital stays, blood tests, ultrasounds, ambulance ride, etc, I have spent around €200 out-of-pocket. This would have cost me thousands of dollars in the US, even with insurance.

Sick Days

With COVID-19 everywhere in the news these days, sick days have become a topic. In Germany, there are employment laws related to sick time and insurance. If you're sick, and go to a doctor, the doctor may choose to give you a sick note ("Krankschreibung"), which exempts you from work for the time specified by the doctor. The sick note has 3 carbon copies: one for you, one for your employer, and one for the insurance company. When you submit the appropriate papers, your employer is legally obligated to pay you for this sick time. Further, the employer is reimbursed by the insurance company for a portion of your wages during this time.

What this means practically is: when you have a cold, or the flu, or you're worried about being contagious, it costs you €0 to go to the doctor, get checked out, and you can't be docked pay or lose your job for staying home under the doctor's orders.

To my knowledge, companies here also don't have "sick days". When you're sick, and the doctor writes you out of work, you stay home. When you're sick more than 10 days per year, that sucks, but you don't lose vacation time or pay over it, and your employer doesn't hemorrhage money to pay you for time where you're not working. (I'd imagine this might make some service-industry logistics tricky, but on the whole, it's a benefit for society).

Choice, costs, payment, and the long term

If you have a normal job where you take home a regular paycheck, you’re obligated to use public insurance unless your annual income is higher than some threshold (about €60k in 2019). These folks are referred to as "compulsorily insured". If you earn more than that threshold, you have the right to opt-out of public insurance and go with private, and you become "voluntarily insured". If you’re purely a freelancer or run your own small business as a sole proprietor, you're also voluntarily insured, and may choose either public or private.

Those are your rights and obligations in general terms, but their practical meaning depends a bit on how the insurance is administered. Both public and private insurance are administered by individual companies. In the case of public insurance, the companies are public, non-profit companies, but there around 150 different public insurance companies to choose from across Germany. So while most people have compulsory public insurance, they still have a variety of insurance companies to choose from for that insurance administration. I suspect this provides some semblance of market competition, but at the same time, you don't see advertisements for public health insurance companies all that often. Private insurance companies in Germany operate similarly to how they do in the US - they're for-profit enterprises, and usually run by companies that offer a wide variety of non-health insurances as well.

For universal health care, that's a lot to choose from, even if you're in the compulsory insurance zone. So, how do you choose?

If you're going with private insurance, the answer surprisingly isn't cost. The cost of public insurance is regulated and standardized to ~15% of your income, with a minimum and maximum payment amount. This is the price regardless of which provider you choose, and your employer pays for half of it, so you'd see about 7.5% of your salary deducted for health insurance from every paycheck. All About Berlin has a good write-up of the maximum and minimum costs, but in general, you'd pay between €80-400 if you're an employee, and between €180-850 if you're freelance. This might seem dramatically more expensive as a freelancer, since you don't have an employer to cover the other half, but while you pay the full sum to the insurance company, usually you get a tax rebate for the "employer's portion" every year when you file your taxes.

The cost of private insurance is structured similarly to the US - your monthly premiums are based on your age, risk-factors, coverage, and deductibles. If you're young and have a high deductible, your premiums will be lower.

In summary

"Medicare for All" or Universal Health Care in the US doesn't need to be single-payer to be effective, and implementing single-payer without creating a system to handle paid sick leave will definitely be ineffective. When you go out to the polls today (or in the coming weeks when you vote), remember that, and consider that being hard-line on single-payer alone will not get us there.