According to T. R. .Reid in “The Healing of America”, everyone in Germany is required to belong to one of the approximately 200 non-profit “sickness funds” that vigorously compete for members.
On a regional basis, the groups negotiate rates with doctors and hospitals. The members never see a bill. Virtually all health issues are automatically covered and payment rates are pre- determined, so the purpose of the insurance companies is simply to process invoices. Thus the cost of administration is only about a third of the cost of the US health care system (which in turn amounts to 20% of the total cost of care.)
As in the USA, the cost is paid for through employer and worker payroll contributions. Premiums are a percent of pay (and thus somewhat ‘progressive’), similar to Social Security in the USA. The deductions are “almost exactly equal to what an American worker and his employer pay in Social Security and Medicare taxes but “the German workers get a better deal” because they include health care.
Unemployment benefits cover the total cost while the worker looks for a new job.
There are provisions for private insurance and about 7% of Germans choose this route.
