German Sickness Funds: A Case Study

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To encourage the best healthcare options for its people, the German government has incentivised competition amongst sickness funds by allowing them to negotiate their contribution rates. For example, one sickness fund may offer a contribution rate of 11 percent tax (half of this being paid by the employer), but does not offer coverage when travelling abroad. Another may offer a contribution rate of 10 percent and coverage while abroad, but have a higher co-pay. In this way, the citizen still has the ability to choose between coverage plans and price. The larger the sickness fund, the better paid the staff and management is. The sickness funds are encouraged to create the best plans for the best prices ("Interview Karl Lauterbach."). Because …show more content…
Despite the inconvenience, nearly 90 percent of the population utilizes the services offered by the sickness funds (Underwood). With the system designed as it has been, all people have medical care available to them in which all people pay for each other. As was noted by German parliament member Karl Lauterbach, it is a system “where the rich pay for the poor… and where the ill are covered by the healthy” (2007).
Also called the “[fifth] branch of… social insurance,” the German’s offer additional health assistance called “long-term care insurance” to better assist those who are unable to take care of themselves ("Long-Term Care Insurance."). This includes those who are ill, disabled, or are unable to look after themselves for a period longer than six months. Like the compulsory health care program, it is mandatory for German’s to contribute through taxes to this program and is split between themselves and their employers. As the nature of the program entails, over 80 percent of those receiving care over 65 years of age ("Defusing the Demographic “time-bomb” in Germany."). In determining which benefits will be offered to the recipient, three categories were designed to assist medical services: care category I, which implies

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