Rising medical costs, higher unemployment and a rapidly aging population are putting the health-care system under tremendous financial strain. This all sounds close to home but a story in today’s WSJ says those problems are confronting health care in Germany, whose system is often held up as one of the world’s models.
Costs in the German system are shared between employers and workers, whose premiums are pegged to income, the paper reports. Everyone is obliged to pay into the plan — the world’s oldest publicly sponsored health-care system that dates back to Bismark in 1883 — and the government is looking to boosting employee contributions to cover a $11.1 billion shortfall expected next year, according to the WSJ.
But that’s only a short-term answer. “Germans already pay 8% of their gross wages into the centralized health-care pot, while their employers contribute an amount equal to 7% of gross wages,” the paper reports. Longer term, analysts expect Germany will be forced to make painful cuts to the system.
“Yet in a country where quality universal health care is considered a basic right, such proposals are extremely controversial,” the WSJ says. Contrast that with overhaul efforts going the other way in the U.S., where proposals to extend health-care coverage to more Americans are proving extremely controversial as well.
Photo of doctor in Berlin: Getty Images