“Germany is widely regarded as the first country to have introduced a national system of social and health insurance. A mandatory health insurance requirement was introduced at the national level in 1883 during the chancellorship of Otto von Bismarck and was expanded over the following century to the areas of occupational accidents and disease (1884), old age and disability (1889), unemployment (1927) and long-term care (1994). At the core of this so-called Bismarckian system lie the principles of mandatory membership and non-risk-related contributions kept separate from general tax revenue – principles that, in their essence, have remained largely unchanged to the present day.
“The origins of SHI in Germany can be traced back to the mutual-aid societies that emerged from the guilds of the late Middle Ages. During the nineteenth century, the rising class of industrial workers continued the tradition of these societies by setting up voluntary mutual-aid organizations specific to their various occupations. Individual companies and local communities also established mutual-aid schemes, which complemented assistance provided by municipalities and charitable institutions. In 1849, Prussia – the largest of the German Länder at the time – made health insurance mandatory for miners and allowed local communities to oblige employers and their employees to pay financial contributions.
“The Act on Health Insurance for Blue-collar Workers (Gesetz betreffend der Krankenversicherung der Arbeiter), which was signed into law on 15 June 1883, built upon this patchwork of sickness funds, introducing a mandatory health insurance requirement throughout the German Empire for industrial workers, skilled craftsmen and blue-collar workers in other commercial enterprises who were earning up to a legally defined income ceiling. Employees subject to the mandatory insurance requirement paid two-thirds of the health insurance contributions, whereas employers paid one-third.
“At the same time, both employers and employees were obliged to appoint representatives to each sickness fund’s administrative board in a manner proportionate to the 2:1 employer:employee contributions. The administrative board was able to set the contribution rate, define optional benefits and address other issues related to sickness fund by-laws within the limits set forth by pertinent legislation. Initially, the sickness funds were free in their choice of health care providers and in determining the nature of contractual relationships with them. The role of licensing and supervising the sickness funds was assigned to the Länder governments, whereas the remit of the national government and of the Reichstag was limited to setting the regulatory framework for these otherwise self-governing entities.”
Source: Busse R, Blümel M. Germany: health system review. Health Systems in Transition, 2014, 16(2):1–296.
“Three recent Long-Term Care Strengthening Acts have considerably expanded the benefits package. This was coupled with an increase in insurance contribution rates by 0.5 percentage point. Part of this increase (0.1 percentage point) is used to create a long-term care precaution fund to stabilise future contributions after 2035. However, long-term sustainability of long-term care insurance depends strongly on future demographic developments and migration, which are difficult to predict. The median age of the German population is the highest in the EU and fertility rates remain low but have improved since 2010. The EC 2015 Ageing Report – from before the long-term care reforms – show that public spending on long-term care as a share of GDP is below EU average in Germany, but it is projected for some scenarios to exceed the EU average by 2040 (European Commission and Economic Policy Committee, 2015).”
Source: OECD/European Observatory on Health Systems and Policies (2017), Germany: Country Health Profile 2017, State of Health in the EU, OECD Publishing, Paris/European Observatory on Health Systems and Policies, Brussels. http://dx.doi.org/10.1787/9789264283398-en
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Page last updated Jan. 25, 2023 by Doug McVay, Editor.