Social Health Insurance

In Germany, the modern German health care system can only be understood in light of its nation’s history starting with the industrialization of the country. From that time, mandatory health insurance on a national level was introduced in 1883. This also resulted into social conflicts that led up till the national-socialist period in 1933 to 1945. After the World War II, the country was divided into two separate German states and later reunited as one in 1990. Nevertheless, it is interesting to note that the German Health Care System is considered one of the most expensive in the world.

Although the government pours a considerable amount into the health care system, the German Health Care is also considered as a mix system and leans more towards the Social Health Insurance. (European Observatory on Health Care Systems 2000) “As with all forms of insurance, SHI is prospective financing. This means that funds are collected in advance, mainly in the form of regular contributions (or premiums), without knowing when or for whom they will be needed. These contributions come from the insured households and also often from employers and from government.

 In some countries SHI is universal, i. e. every household is covered, and so every citizen must make contributions, although government may do so for the poorest and the unemployed. In other countries, only parts of the population are covered (e. g. formal sector workers may be compulsorily covered). The contributions go to one or several SHI Funds, which are separate from government but which are generally established by statute, on a not-for-profit basis. The Funds use the contributions to purchase health care services from providers for insured households (often called Fund members). The providers which treat members may be owned by the Fund itself task dpresentation or report.

Or they may be separate public or private facilities, with which the Fund has a contract, and which may also treat other non-member patients too. The services provided to members may be free, or members may have to pay some proportion of the cost when they are treated (a copayment). ” (Eldis 2006) The following diagram seeks to show the flows of funds and services graphically: There are many countries throughout the world that operated on SHI. In Europe, the Netherlands and Hungary it has operated for more than half a century and it also exists in Asian countries such as South Korea and the Philippines.

This system is being studied by a number of governments that have no SHI, which is common among the poorer countries in Africa. SHI is mainly characterized by the fact that a certain percentage of the gross income of an employee goes directly to the social security system. (Irvine 2003, pp. 1-10) This is similar to what France has instituted, only that in the French’s system, the coverage offered by the state subsidy is larger than the actual cost that a person would avail or pay if the bill is entirely paid outright by the person.