In Germany, individuals purchase insurance through a system characterized by public-private partnership. Federal law requires all Germans to hold health insurance, but does not provide coverage directly. In the German system, about 85 percent of residents purchase heavily regulated, non-profit insurance referred to as Gesetzliche Krankenversicherung (Statutory Health Insurance, GKV), approximately 10 percent buy private insurance, and the remaining 5 percent fall into other insurance schemes.
Gesetzliche Krankenversicherung (GKV) covers the majority of Germans.
- All Germans earning under a yearly adjusted rate (approximately €50,000 per year) are required to purchase GKV from a Krankenkasse.
- Individuals pay for insurance based on their income, paying 8.2 percent of their gross wages up to €44,550 (in 2011) while their employer contributes an additional 7.3 percent of their gross wages up to €44,550 (in 2011).
- Krankenkassen (Sickness Funds) are heavily regulated, non-profit insurers who are legally required to accept all applicants and are permitted to sell health insurance (GKV).
- Traditionally, Krankenkassen were associated with industries, meaning that individuals would purchase GKV through the Krankenkasse in their industry. Today, individuals have greater freedom to choose between Krankenkassen, though they must still buy through their employer.
- GKV includes complete coverage of most health needs, with the exception of long-term care.
- GKV does include long-term care, but benefits are usually insufficient and most choose to supplement GKV with private insurance.
- A council of representatives from the health care industry, the Gemeinsame Bundesausschuss, has legal authority to determine what services must be included in GKV.
- Providers negotiate with Krankenkassen on a regional basis to determine eligibility.
Civil servants and the self-employed, who are not covered by the employer-based GKV system, purchase private insurance. In addition, individuals earning above approximately €50,000 per year are permitted to opt out of purchasing GKV and purchase private health insurance instead. Private insurance is also heavily regulated, but is generally more flexible and more expensive than GKV.
Health practitioners enter the market by gaining certification from legally mandated regional professional organizations. From there, practitioners may open a practice or join an existing practice, which are mostly private. They may also choose to work as salaried doctors at hospitals.
Hospitals are mostly publicly-owned, accounting for about half of all beds, while non-profit private hospitals make up about a third of all beds.