Health Reform Without a Public Plan: The German Model

First, these countries all mandate the individual to be insured for a basic package of health care benefits.

Second, these nations try to tailor the individual’s contribution to the financing of health care closely to the individual’s ability to pay

Finally, premiums for children are covered by government out of general revenues, on the theory that children are not the human analogue of pets whose health care should be their owners’ (parents’) fiscal responsibility. Instead, children are viewed as national treasures whose health care should be the entire nation’s fiscal responsibility.

To see how this can work, think of the basic functions that any health system must perform. To wit:

• 1. the financing of health care, that is, the extraction of the required funds from individuals and households who ultimately pay for 100 percent of all health care
• 2. the pooling of individual risks with the aim of protecting individuals and households from the high costs of medical care in case of illness
• 3. the purchasing of health care from its providers (doctors, hospitals, drug companies, etc.)
• 4. the production of health care goods and services
• 5. the regulation of the entire system so that it operates towards socially desired ends.