The Germany model of healthcare may be the best one that we can use to change the inefficiencies in our healthcare system to benefit all citizens. We can take the public option that’s being proposed and use it as a statutory health insurance program that can be used by a majority of Americans, or take Medicaid and expand it upwards to 400% of the poverty level.
So what is the Germany multipayer model?
Germany has a universal multi-payer health care system with two main types of health insurance: "Statutory Health Insurance" (Gesetzliche Krankenversicherung) known as sickness funds (Krankenkassen) and "Private Health Insurance" (Private Krankenversicherung).
And here’s how it works in Germany:
Coverage is universal for all legal residents. About 85 percent of the population is covered by social health insurance and 10 percent by substitutive private health insurance. The remainder (e.g., soldiers, policemen) are covered under special programs. Undocumented immigrants are covered by social security in case of illness. All employed citizens (and other groups such as pensioners) earning less than €4,237.50 (US$5,422.80) per month (€50,850.00 [US$65,074.00] per year) as of 2012 are mandatorily covered by SHI, and their dependents (nonearning spouses and children) are covered free of charge. Individuals whose gross wages exceed the threshold, civil servants, and the self-employed can choose either to remain in the publicly financed scheme on a voluntary basis (and 75% of them do) or to purchase private health insurance.
Our ACA system is closest to Germany’s in that each person is required to have insurance, there are co-pay limits, and the ACA is a multiple-payer system as well. However, there are stark differences such as these below:
- Class gaps exist with those at poverty level are eligible for Medicaid while the middle class and above are forced to pay for private insurance.
This existing class gap is what’s fueling the resentment of the middle class against the poor and minorities since they see them as getting “free stuff” that the middle class isn’t eligible for. By expanding Medicaid upwards from the poverty level to 400%, we can eliminate the existing class gap and remove it as a wedge issue for elections.
Another difference between the Germany multi-payer model and our existing multi-payer model with the ACA is how hospitals and pharmaceuticals bills private insurers for procedures that we use. We currently don’t regulate the billing structure which is variable, whereas in Germany’s they use an uniform fee structure where a single code is used to lay out the costs for each procedure that all physicians in Germany have to abide to.
In America, operations can vary by thousands of dollars depending on which cities, states, or even small towns you visit. That kind of variable billing structure is a joke, but one we can fix. And what about the taxes? In Germany, the personal tax rate is about 50% which basically funds education, healthcare, and other civic services.
Here? Our tax rate is 25% to 35%. How do we increase the personal tax rate without losing voters in the general election? Answer is we look at carbon taxes as a way to increase our nation’s GDP, so more of the federal GDP can be allocated towards a Medicaid expansion, while taking away some of the GDP we’ve allocated to the defense industry to put to good use on healthcare system.
By expanding Medicaid up to 400% of the poverty level which means a middle-class family of four making nearly $97,000 a year can enroll in Medicaid. Also, the discomforting reality is most of Americans today aren’t in the middle-class anymore, which means the Germany multi-payer model is going to cover nearly all of Americans alive today. And for those who are beyond the income limit of Medicaid expansion, they can continue to be a part of it by paying a greater portion of their income, or enrolling in private insurance plans.
I think that this is the best system that we can go with right now to change our healthcare system for the better.