Problems of private health insurance

Health systems in Germany and the USA were shaped under different conditions. Whilst the German system bases on the principle of care which means that only better off persons enjoy a private health insurance. The American system bases on voluntary nature.

If the insurant is willing and able to take out a health insurance or additional insurance in order to minimize individual risks. That explains why Americans are reluctant to accept the plans of the Obama administration to introduce a statutory health insurance for all citizens. These different approaches cause different problems.

The German legislator interferes in insurances which supposed to be aligned along free market lines. That causes problems again and again. On the one hand the insurance companies (statutory insurances) must be competitive on the other hand they are supposed to guarantee primary health care for all employees as well as for all in need. Private insurance companies are not that constrained but the legislator imposes restrictions again and again. As a result the unpopular base rate was introduced. The health care system has to bear skyrocketing costs due to progress in the field of medicine and an aging society. In order to break even statutory insurance must charge an additional amount.

Private insurance companies must raise the premium consistently. It is about accepting the challenge of cutting the costs for insurances. As a result insurants will face increasing premiums, more personal contribution, or more additional insurances.

The main problem in the USA is that many did not take out a health insurance at all. As a result humans die from curable diseases because they nor afford the appropriate drugs neither the doctor’s bill. Normally they cannot afford to pay for a health insurance either. President Obamas suggestion to introduce a statutory insurance for all citizens didn’t go down particularly well. Americans fear an infringement of freedom of choice. In addition the quite expensive health care system poses a problem. Therefore the insurances are expensive, too.

Reasons are controversial. Some argue progress in the field of medicine is responsible. Others blame inefficient treatment and bad incentives to cause a cost explosion. Sooner or later the United States must introduce a basic insurance cover in order to handle the many without insurance. For that reason a comprehensive and profound reform of the health care system is indispensable. In the years to come the development is going to be interesting.