The German health care system has been subject to continual reform efforts and is still a subject of fierce debate. The most recent reform aims to simplify health benefits, provide more choices, increase transparency and create competition among providers. The most important issue at hand, however, is the strengthening of the program’s long-term financial foundation. For many of those involved in the health care industry, this reform merely represents a compromise between two parties that offer differing solutions. As such, it seems unlikely to achieve the stated goals.
The following article summarizes the key elements of the new reform and takes a look into what the near future might hold. Last updated: 26 May 2009
Since the 1980s, Germany has enacted and implemented 14 health care reforms. While previous reforms were directed at providing more efficient and cost-effective health care services, the most recent reform focuses on the structure of health insurance funds, marking the first time this topic has been addressed. The current reform is designed to ensure that the country will be able to finance future health care expenses in light of disproportionately rising health care costs. Among other things, the reform gives consideration to the impact of cost-intensive treatments, demographic change and the emergence of new disease patterns.
The topic of health care funding is set to remain a crucial issue and, consequently, to play a role in the upcoming campaigns for the Bundestag elections in September 2009. The fact that the various parties advocate different concepts means that the issue is a top priority. It is highly probable therefore that further health care reform will be introduced following the formation of a new government, as follows:
The goal of the Social Democratic Party (SPD) is to adopt private insurance. Every German citizen would be required to be a member of the social health insurance system and to pay a portion of premiums based on a percentage of the individual’s total income, including salary, rental income, interest received and any other sources.
The Christian Democratic Union (CDU) likely would propose a per-capita premium for every adult, which would pay for basic and supplemental coverage available through individual private health investment.
Both ideas would include hardship regulations to cover lower-income individuals.
Regardless of the outcome of the Bundestag elections and the possible consequences for health care policy, the current trend of German employers becoming more involved in employee health care provisions is likely to continue. Today, government statutory and tax benefit schemes are leading many companies to take more responsibility for implementing employee health care programs, including higher contributions to health benefits or appropriate action as part of occupational health care management. Companies should, therefore, start developing programs now that will allow them to keep pace with this trend.
How the new fund will be structured
Germany’s 2006 health care policy changes and amendments have been gradually implemented over the past few years, culminating at present in the introduction of the health care fund (Gesundheitsfonds). The health care fund is the new cornerstone for funding German health care spending. It serves as a tool for distributing income that comes from social security contributions and taxes to the new health insurance funds.
Employer and employee contributions to health insurance funds will flow into the health care fund. Until at least 2011, this will happen the same way as before − via the social sickness funds. But from 2011, the contributions will flow directly into the fund. In addition, for the first time in Germany’s history, taxes are being contributed to these funds in order to finance growing health care costs.
The most significant recent changes for employees and employers, taking into account the information for foreign employers who have foreign nationals working in Germany, are as follows:
Compulsory health insurance, through either a statutory policy or a private health insurance policy, was required by 1 January 2009 at the latest for all persons living in Germany as of 1 January 2007.
Insurance coverage may be provided by authorized German health insurers only; this requirement also applies to insurance coverage for foreign nationals who have a German work permit. However, an expat employee who remains in Germany for more than five years must be covered by a German statutory policy or private health insurance policy starting no later than the sixth year (source: Book V of the Social Security Code [Sozialgesetzbuch]).
The general contribution rate to health insurance increased to 15.5 % of gross salary, up to the social security contribution ceiling, as of 1 January 2009. The second economic stimulus package specifies that this rate shall be reduced to 14.9 % as of 1 July 2009.
The contribution requirements for the health care fund are allocated as follows:
1. Beginning January 2009: 7.3 % employer contribution and 8.2 % employee contribution
2. Beginning July 2009: 7.0 % employer contribution and 7.9 % employee contribution
3. As of 1 January 2009, old-age reserve allocations will be transferred for those individuals changing to a new private health insurer. These financial reserves take into account the higher health care costs incurred by older individuals.
In addition, as of 1 January 2009, a new fee structure was introduced for German doctors to replace the old point-based fee scale for treatment centers. This change is negatively affecting patients covered by social health insurance because some doctors are providing treatment only if payment is made in advance, although this practice is unlawful.
Implications
As stated above, the new reform aims to simplify health benefits, provide more choices, increase transparency and create competition among providers. These results have not yet come to pass, and many believe that the core issue of financing the enormous German health care system has not been properly addressed. We have seen no mention of reducing cost, only of spreading the cost risk differently and hoping that the government will subsidize a greater amount.
In addition to hoping for more government funding, many social funds plan to implement the so-called Zusatzbeitrag, whereby an additional 1 % of income is added to the maximum social health security contribution ceiling. The Zusatzbeitrag is a government instrument intended to extract an additional premium to pay for members’ health insurance.
Compounding the problem of adequate funding are concurrent reforms in the long-term nursing care system, which are likely to lead to higher premiums. Rather than controlling cost, these efforts collectively may result in increasing the overall cost. At the moment, it seems that real reform will not take place in 2009, but will be delayed or reviewed following the next election. Until that review occurs, we are likely to see further cost increases. Unfortunately, the more centralized medicine gets, the easier it seems to be to pass along health insurance premiums to the members. The German health system uses a rather ironic slogan: “After the reform is before the reform.” We will have a clearer picture after the elections . . . so stay tuned.
http://www.mercer.com/referencecontent.htm?idContent=1346005
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