It’s been about a year since the United States fully implemented the Affordable Care Act – called by friends and foes “Obamacare.” It’s been about a year since curiosity rose in Europe about the highly contested milestone reform, and since my editors got hungrier by the day for stories about healthcare in America.
And it’s been about a year since people started calling me a socialist – neighbors, interviewees, even friends who are working in the health care arena. Sometimes with a wink, sometimes dead serious. For one, because I think that Obamacare, overall, is a step in the right direction. But mostly because I happen to be from Europe — Germany to be precise–and that’s where, in the minds of many Americans, the somewhat subversive ideas that inspired the ACA are harbored.
At first glance, there’s some truth in this. It seems like the Affordable Care Act has pushed America a tad closer to Europe, a baby step. Mostly because there is an insurance mandate in place in the U.S. now, which is also the case in most European countries. Also, because insurance companies can no longer deny coverage based on pre-existing conditions, and parents are allowed to insure their kids under their plan until age 26.
And that’s where the similarities end. The most obvious difference, no doubt, is that for the American population between the ages of 18 and 65, which makes up the majority of the workforce, health insurance still is, by and large, based on private, for-profit coverage. In most European countries, health care is largely a not-for-profit endeavor, and is therefore regulated, organized and subsidized by the government.
Also, there is no such thing as a uniform European health care system, as each country has its own, and most of them vary considerably. It’s somewhat ironic that Britain – which of all European nations is considered politically, economically and culturally closest to the United States – has the only “socialized” health care system in the Old World that truly deserves the name: the National Health Service. In my native Germany, health care is more market oriented, and patients for the most part have the choice of insurance, doctors, hospitals, and treatments.
Spreading the risk is one of the principles that German health care was established upon 131 years ago. Federal law requires all Germans to have health insurance, but does not provide coverage directly. About 85 percent of the population purchase non-profit insurance called statutory health insurance. Premiums are based on the individual’s income. A person pays roughly 8 percent of their gross income into the insurance, while the employer contributes about the same amount.
Private insurance is bought by 10 percent of the population, mostly civil servants and self-employed. The private insurance market is also regulated, but is more flexible, more expensive and offers better elective services, like a single hospital room, or faster treatment by a leading physician. The remaining 5 percent fall under specialty insurance programs.
All insurance in Germany covers comprehensive medical care. Health care spending in Germany accounts for 11 percent of the GDP. In the U.S., it’s 17 percent. Less than 1 percent of the German population has no health insurance at all; compared with 13.4 percent in the U.S., almost a year after the ACA went into effect – which is the lowest the uninsured rate has been since 2008.
Insurance and job are separated
Another difference: in Germany, health insurance and employment are, for the most part, de-coupled. While the ACA tries to fill that gap now, the majority of Americans still receive health insurance through their employer. When they leave or lose their job, they often lose insurance. In Germany, individuals can keep their insurance when they switch jobs, take it to the next employer, who will then continue to pay the mandated share, or pay the full premiums themselves. In case of unemployment, a government agency will jump in and subsidize the payments.
While certainly not socialized, the German health care system is heavily regulated, especially when it comes to doctors’ and hospital fees, as well as drug prices. Also, there are caps on the number of physicians who are licensed to practice in a certain geographical area. A doctor in Miami once explained to me that in America, you may have a hundred plastic surgeons and no family physician within a 30 mile or so radius – just as long as the market supports it. No chance for that to happen in Germany.
Here lies, I’m convinced, the deepest ideological divide between the European and American approach to health care: How freedom is defined. While Americans often feel that government intervention restrains their freedom, Europeans, by contrast, expect governments to secure freedom for their citizens. Many Americans therefore perceive a health insurance mandate as a constraint on their personal freedom, even though accidents and illness make up the largest share of personal bankruptcies in the U.S. Most Europeans, on the other hand, view mandatory insurance as peace of mind, providing the freedom of not having to worry about exploding medical costs and instead, being able to focus on whatever they consider important in their lives.
Finally, it’s not only that the U.S. has come a tiny bit closer to Europe in the field of health care, but also that Germany’s health care system has become more “Americanized”, albeit involuntarily. While the United States has the best-trained doctors and most advanced medical technology on the globe, the problem is that access to this world-class medical care is limited to those who can afford it. It’s interestingly enough that Germany, of all places, having been described a role model for “equal access” quality medical care, has come under growing scrutiny for developing exactly what “Obamacare” is trying to fix: a two-class health care system.
In recent years, more and more Germans with statutory health insurance have been seeking treatment in the country’s emergency rooms for problems that don’t require emergency care. They have health insurance, but doctors’ offices are swamped, and it takes those patients up to three months to get an appointment, with a specialist in particular. For patients with private insurance, it’s a different story, because they have proven to be more profitable for doctors. All this happens as health care costs in Germany are on the rise, and out-of-pocket payments for all patients have doubled in the past 20 years.
Maybe neither socialism nor capitalism is to blame. And maybe organizing health care and making it widely accessible is just an extremely complex and, at times, incredibly messy business, that requires continuing review, tinkering and sometimes, substantial change.
Katja Ridderbusch is an Atlanta-based senior foreign correspondent for German news media, including daily nationals Die Welt and Der Tagesspiegel, as well as Spiegel online. She frequently reports about health care in the U.S.