When you approach the idea of a healthcare system from an American perspective, then you can see that there are clearly some problems which need to be resolved. There are times when families in the United States go through long periods, especially during the ages of 18 to 24, when there is no healthcare coverage at all. Recent changes to the system allow for parents to keep their children protected until the age of 26, but nothing is guaranteed because the legislation can always change.
When you think about healthcare insurance in the United States, then there are three outcomes to consider. Your policy is either too expensive to meet your current financial needs, doesn’t provide enough coverage for your family, or gives you both of these problems.
In the search for an alternative system that works, the German healthcare system often receives a lot of attention from Americans who would like to see an improvement in their costs and access to care. Over 18% of the U.S. GDP each year goes toward medical expenses. When one looks at the structure of care in Germany, there is a potential compromise that might be usable.
List of the Pros of the German Healthcare System
1. It does not provide 100% free healthcare coverage to everyone.
The German healthcare system does not use a socialized single-payer system like many Americans fear would happen to their care if a Medicare-for-all structure were implemented in the United States. You still need to pay for health insurance in Germany. The only way that you can receive free care is if you are elderly, disabled, unable to work, or living in poverty. It has to do with more than what you pay for the services you receive.
As a student in Germany, all you need to pay is 90€ per month to receive full coverage. This cost will cover your doctors’ visits, eye exams, dental care, and some minor specialist needs. If you have health issues, then there are no questions asked. You don’t need to worry about the costs of an ambulance ride or ER admission because everything is covered.
2. There are fewer prescription dependency issues in Germany.
The German healthcare system prefers to take a wait-and-see approach whenever there are treatment options necessary for a patient. Because there are fewer people taking opioid medications to control their pain, the country is dealing with a lot less abuse of drugs when compared to other countries – especially the United States. Although this can create high levels of discomfort for some patients, the end result is a lower cost to society because there are fewer long-term treatment expenses to manage thanks to the addictive qualities that these medications promote.
3. Private insurance plans are possible in the German healthcare system.
If you earn more than the threshold set by the government each year or are not eligible for the public scheme, then private health insurance is available in Germany as well. As of January 2019, there are 40 different insurance providers operating within the country that can help to provide access to care needs for an affordable price. Most of these agencies will not accept someone who has moved to the country until they have been a resident for at least two years. Although there are limits on reimbursements and co-insurance payments are possible, it allows everyone to receive coverage.
4. Your hospital and prescription co-pays are exceptionally reasonable in Germany.
When you receive care under the German healthcare system, then your maximum cost for a hospital stay on the government scheme is only 10€ per day. You will also pay a maximum yearly out-of-pocket cost for hospital stays of 280€. Members of the state health plan will also pay just 10€ in co-payments for their prescription medicine. Although you must be willing to accept generics whenever they are available, you will still have access to name-brand items if that is what is called for in your treatment plan.
5. You can shop around for a better deal in Germany.
When you are a member of the state health plan, then you have permission to shop around for the best price to ensure you have the correct coverage you need for yourself and your family. You can also look for the best provider of supplemental insurance policies that can cover dental care, a private doctor, private hospital accommodations, and other specific benefits that you may want to have. When you are on the public system, then any pre-existing conditions which you might have do not matter. If you require care, then you receive it for a specific cost.
6. It is possible to combine the public and private health insurance options.
When you are living in Germany, then there are three options available to you for health insurance. The Germany healthcare system allows you to use the regulated public health insurance system, private health insurance, or a combination of the two. Your private policy can even come from outside of the country if you wish. You can opt for full coverage from a private insurer if you are self-employed as well or if your income rises above a specific threshold. For those who qualify, you can combine the two options to access each resource as necessary to meet your care needs.
7. Employers cannot penalize you for switching from public to private insurance.
The German healthcare system believes that the choice of an insurance provider is something that you can do on your own. Your only stipulation is that the gross annual salary you make from your employer must exceed a specific threshold. You still get to take advantage of the employer subsidies that are available in the public scheme, which means about 419€ per month in benefits are given to you. Then it is up to you to supply the rest of the cost out of the salary that you earn.
This issue can become a little problematic if you are self-employed. Much like American freelancers must pay the employers’ share of the Social Security and Medicare withholdings, so must German workers with their healthcare plans. Part-time workers, civil servants, and anyone earning less than 450€ per month also fit into this situation.
8. Most doctors see patients on a first-come, first-served basis.
German doctors do not have any rules to follow when it comes to discussing your treatment, prognosis, alternatives, or risks. That means it is up to you to ask questions about the care you are receiving. Most providers will also work with their patients on a first come, first serve basis even if you have an appointment. That means you can get in pretty quickly to see someone if you arrive early in the morning for care, but it also means you might be waiting for some time even though you scheduled a specific time.
If you need to see someone outside of the regular business hours, you can go directly to an emergency room, call the local hospital, or contact an emergency doctor who works with your primary caregiver without a significant extra charge like you would find in the United States.
9. You can always expect to receive high quality care.
There are several cultural differences that you will notice when receiving care in Germany compared to the rest of the world, but you can always expect to be given the highest quality of care wherever you go. Many of the doctors and nurses tend to be on the younger side because of the pay scale available in the German healthcare system, but that doesn’t necessarily alter the experience. Make sure that you research what to expect before visiting a provider, and you will have a low-stress experience. Hospitals always place an emphasis on the treatment you receive, even if the levels of privacy are a little different.
10. Germany has strict anti-corruption laws.
You may need to ask questions of your doctor in Germany, but you will always receive an honest answer. Doctors here will not hide any information at any time. Most of them will ask plenty of questions about your medical history to ensure that their diagnosis is accurate as well. There might not be a patient’s bill of rights here, but the overall system is one that is based on respect, transparency, and honesty. The overall goal is to ensure that you can get home as quickly as possible through an efficient and effective delivery system.
List of the Cons of the German Healthcare System
1. You will need to pay for elective procedures and some prescription medications.
Because the German healthcare system does not provide universal care, there are some specific expenses that individuals must pay when they speak with their medical provider. Most elective procedures are not covered by the insurance policies in Germany, which means the cost for them is out-of-pocket. You are also asked to pay for the cost of certain prescription drugs with this system. If the insurance company disagrees with the diagnosis of the doctor of a medical need, then you can become embroiled in the same back-and-forth that happens in the United States when care is necessary.
2. Doctors do not make a lot of money in this healthcare system.
Most of the doctors who work in the German healthcare system earn a fraction of what they could make in other parts of the world today. Many of them earn less than 100,000€ per year for the work that they do. That salary is the equivalent to what fast food managers make in the country after taxes. This payment structure makes it challenging for the country to retain their best doctors since they can make twice that much by going to a universal system like the one in the UK or Canada. You might receive coverage and care for just about anything, but the quality that you receive might not reach your expectations.
3. Medication is a last-resort option in the German healthcare system.
When you go to visit a doctor in Germany, then you will not automatically receive a prescription medication for the problem that you have with your health. Doctors in the healthcare system there prefer to exhaust every possible option before treating you with something stronger than what you can purchase over the counter. If your pain is intense, the time you must wait to prove that ibuprofen or Tylenol is enough to manage your symptoms can make it challenging in the first days of recovery.
4. Some people still cannot afford the public healthcare costs.
As of January 2019, the public health insurance costs charged by the Krankenkassen are 14.6% of your monthly income, up to a maximum salary of 4,538€. There is another 0.9% median supplemental premium on top of that. The average monthly premium on the market for the 110 public providers can be up to 720€ per month for some households, which is significantly higher than the costs and insurance that some families in the United States pay. There is also a mandatory nursing care insurance cost that can be up to 150€ per month as well.
Employers pay 50% of the healthcare costs in 2019, which means your maximum monthly out-of-pocket is 360€.
If you are one of the households that tops out at the maximum premiums for the public scheme, then you will be paying over 10,000€ per year in medical premiums. The only difference to the American system is that you have guaranteed coverage and costs, so it becomes an expense you can budget.
5. Private insurance in Germany doesn’t always cover pre-existing conditions.
Every person who receives private health insurance in Germany (whether it is by choice or not) will receive an individualized premium that is based on their chosen tariff and their age when entering into the policy. The underwriting process is permitted to charge a supplemental premium if there are any pre-existing conditions for the patient. Although you will not be denied coverage because of this issue, the cost of what you are asked to pay could become a significant portion of your salary if you do not qualify for the government health scheme.
There are no exceptions for your premium payments if you hold private insurance in Germany either. If you become ill or are not working because of a health issue, then you still must pay your premium. Only a handful of tariffs will subsidize this option for you.
6. The public health insurance scheme is mandatory unless you make enough income.
Unless your gross salary is more than 60,750€ per year in 2019 when living in Germany, then membership in the government scheme for healthcare is mandatory. That means your income dictates how much you pay for a minimum period of at least 18 months with most providers. You do have permission to switch government health fund providers by giving a 60-day notice after 18 months of membership or when supplemental premiums increase.
7. It is illegal to not carry health insurance if you live in Germany.
Germany requires everyone to carry health insurance of some type. If you are in good health, then the government recommends that you tried to purchase a suitable benefits plan from a private health insurance company that is willing to except someone from outside of the country. Brokers that specialize in working with expatriates will typically find the best coverage for you. If you decide to hold non-German insurance, then you must still pay into the long-term nursing care fund. You also might want to purchase supplemental sick pay insurance. If you are self-employed and moving to Germany, it may be next to impossible to find the coverage you need.
8. Dental coverage only uses the absolute minimal standards.
If you need dental care in Germany, then the services can become expensive. Any major dental work that involves orthodontics, crowns, or bridges requires that you receive a cost estimate and present it to your insurer before receiving treatment. Failing to take these steps can result in a requirement that you pay the entire cost. Porcelain, gold, or other materials are not part of the cost estimates either, so it is almost mandatory to carry supplemental insurance if you want to avoid an unpleasant expense. Some services require you to pay 80% out-of-pocket for the dental work you receive.
9. Private insurers may require that you be reimbursed for services.
Many of the private insurers in Germany will issue a card with a smart ship on it. If you need to stay in a hospital for some reason, then the bill will be presented directly to your insurer for payment. You will then be asked to cover incidentals and whatever co-pays you have while receiving a copy of the bill. Outpatient services are a little different, with come insurers requiring that you pay the entire bill first. Then you would submit the amount to be reimbursed for the expense. It is normal to pay for prescriptions first in Germany, and then file for reimbursement.
The pros and cons of the German healthcare system have their benefits and disadvantages for everyone, just as any other system does. What you will find is that the overall costs tend to be lower in Germany when compared to the American system because most costs are covered by the insurance premium. Although that means you don’t receive a private doctor, it does mean that everyone in your home receives coverage without an additional charge.
Blog Post Author Credentials
Louise Gaille is the author of this post. She received her B.A. in Economics from the University of Washington. In addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. If you have any suggestions on how to make this post better, then go here to contact our team.