« Don't Call Us, We'll Call You | Main | Johns Hopkins AICGS to Honor Bertelsmann Chief for "Global Leadership" »

Comments

could someone make a parallel between the us and german medical assurance system?
thanks

I have a question, please.

In the U.S. Social Security is taxed. Is that the case in Germany?

The taxation of US Social Security, like all income taxes here, is progressive, that is the rate of taxation increases as your income increases. The progressivity of income taxation means that you hardly pay any tax at all if your income is at or near the median for the US. The top 50% pay virtually all tax. The imposition of income tax on such benefits is an attempt to improve our finances by taxing those who don't really need Social Security in order to live with dignity.

The right would like to change the system so that there is a minimum guaranteed benefit but you can invest a portion of your contribution and get a better return overall.

German social security is structured completely different. There is a base payment + extra payments for expenses like housing and others. Insurances are included. No taxes.
And the numbers cited for Germany aren't from social security, but retirement pensions.

Note from David: Of course, there are large differences between the U.S. and the German system - U.S. social security neither being equal to Germany's "Sozialhilfe" nor to Germany's pension system -, but for the purpose of a posting, comparing the income of roughly the same group in both countries from similar sources is appropriate. Retirees in Germany pay taxes and they don't get extra payments for housing, unless their income falls under certain levels.

@Pamela

" I have a question, please."

You are welcome:

The main difference between SoSe in the US and Germany is that in the US it is considered a tax paid by everyone (cf TM Lutas post). In Germany, however, it is considered a special "fee", not a tax: The monies paid under SoSe do not go to the government, but to "independent" entities for medical insurance, super annuation and unemployment insurance (of course, these entities are closely monitored by the government and the ruling parties). The monthly "fees", however, as with an income tax, depend on a person's income.

As it is not a tax, SoSe is not compulsory for everyone. People with an above average income (roughly more than 60,000 $ per year) are not obliged to pay anything for it - the idea being that SoSe is meant to protect those who are not able to protect themselves, those with higher incomes are deemed able to look after themselves and can afford insurance on the free market. German reasoning: the government decides who needs protection and will force them into SoSe, no matter if they want to or not.

With the years, SoSe in Germany has become a significant extra charge to the monthly income as the German welfare mentality expects SoSe to pay for things that in other countries the government (on the basis of taxes) would take care of.

As a consequence, SoSe has become incredibly expensive with the absurd side effect that people making enough money to leave the system will find cheaper health insurance/ super annuation,... on the free market and will even pay less for it than people with smaller incomes (the ones in the centre of the income bracket: those not making enough money to quit but enough to pay the top rate). Hence: German SoSe punishes the middle class, (letting go off people with high incomes and giving free benefits for those who have nothing, makes small/ average wages too expensive and therefore increases unemployment.

Btw: Sometimes some leftist german politician with the ardent desire to increase taxes will quote the allegedly low german tax rates as opposed to some other country X. they always forget to mention that the average tax payer - unlike as in most non-european countries - will have to pay an extra fee for SoSe, which those other countries is financed through general taxes.

Factoid: The average income of a black worker in America is slightly higher than the average income of all Swedes.

Most poverty in America is transitory, lasting a few months or years. The bottom quintile in 1990 is not the same people as the bottom quintile in 2000. I actually consider it a good thing for everyone to be poor for a short period of their lives. Damage occurs when poverty persists for years and decades. In America, that core group of the chronically impovershed, about 3% of the population, include the addicted and mentally ill/disabled.

A distressing portion of financial hardship among the elderly is having most of their wealth tied up in their home, which they not only resist selling, but feel they have an inherent right to keep on occupying. Does that same problem occur in Germany? In Europe?

Toby, you are a treasure!
>>As it is not a tax, SoSe is not compulsory for everyone

Here in the U.S., the SoSe tax is known as FICA (don't ask me what it stands for, I don't know). And guess what? Federal employees are exempt!

I've just come downstairs to shut down for the night. I've been watching "Tom Friedman Reporting' on the Discovery Channel. I saw it once before about a year ago. The on-topic portion of the broadcast? He interviewed a couple living in Germany - the husband is American, the wife native German. They have 4 children. For each child, if I correctly understand, the parents get a combined 3 years off work and the employer must rehire at the conclusion of the maternity/paternity leave.

The wife, whose name I did not catch, looked to me to be in her early 30's. With 4 children that gives her 12 years off work with full health insurance, no co-pay, etc., and a guaranteed job when she is finished reproducing.

I trust to the Germans here to correct me if I have misunderstood or if Friedman has misrepresented.

The kicker? The American husband, Richard, said at the end of the segment "Europe would rather invest in babies instead of bombs".

Looking at the demographics and the budgets, I think it is safe to say Europe has invested in neither.

I think it is also safe to say that Germany has taken at least one moonbat off my tax-paying hands.

g'nite.

Pamela:

Federal employees who entered government service before January 1, 1985 under the old CSRS system (Civil Service Retirement System) are exempt from paying social security, however they will NOT receive social security benefits. Those who entered government service after January 1, 1985 are under the Federal Employees Retirement System and are required to pay social security, and will, therefore, receive benefits.

"Federal employees who entered government service before January 1, 1985 under the old CSRS system (Civil Service Retirement System) are exempt from paying social security, however they will NOT receive social security benefits."

@JD: But, they do receive retirement benefits from CSRS, right? And, quite generous benefits, if I'm not mistaken.

"could someone make a parallel between the us and german medical assurance system?
thanks"

@neocon: Ah, this discussion would fill up a thousand posts. Suffice it to say that, by law, *everyone* in the US has access to medical care -- whether they can pay for it or not. Emergency rooms *must* treat *everyone* who shows up, regardless of their ability to pay for the treatment. Now, will everyone get the same treatment in the same amount of time? Of course not. They don't in Germany, either (or anywhere else there is government-run or administered health insurance). There's a reason lots of people cross the border from Canada into the US to seek health care. In Canada, they get whatever is available (which often isn't state-of-the-art) whenever it's available (which is often after a very long wait). In the US, if you choose to do so, you can pay for immediate state-of-the-art health care. Or, you can go to an emergency room and wait, just like everyone else, and get treated according to the severity of your situation.

In my very biased opinion, I would say the health care models are converging: Germany is (inevitably) moving towards a more market-oriented (more US-like) system and the US (which is not as different as most people think, but is different enough in key ways) is moving towards a more regulated system.

@neocon, to expand on my comments about health care in Germany vs. the US:

1. Both countries offer choice, which is something (I believe) you don't get in some countries. For example, in Canada (until very recently) there was no private insurance:

Canada sensibly embraces right to private health insurance
http://www.csmonitor.com/2005/0706/p09s01-coop.html

In the US and Germany, there is private insurance.

2. Many people are surprised to hear that there is private health insurance in Germany -- not unlike in the US (and, I'm not referring to the fact that non-government entities actually administer most of the health insurance programs). One really nice benefit of private insurance in Germany is that you get a ticket to the front of the line when it comes to getting treatment. For example, when someone with "typical" employer-sponsored insurance calls to make an appointment, they are told when to come in. When someone with private insurance calls to make an appointment, they are asked when they would like to come in and (in my experience) that time is made available for them. Doctors have bills to pay and mouths to feed, too, and they just love patients with private insurance -- because it pays more for the same treatment than non-private insurance pays. In my opinion, that's very market-oriented...and very un-social, of course.

3. An interesting quote from the article I cited above: "...a US-Canada sponsored study on the state of healthcare that showed Canadians and uninsured Americans had quite similar levels of satisfaction when it came to healthcare. In the same report, more Americans overall (53 percent) than Canadians (44 percent) were said to be "very satisfied" with the state of their health care." Keep in mind that in the US, "uninsured Americans" still get healthcare when they need it.

4. Healthcare is expensive...everywhere. There's no question about that. And, it gets more expensive...everywhere...every year. As a consumer of healthcare in both Germany and the US, I've observed several things (which may or may not be true for others): 1) the quality of care is comparable in both places; 2) the cost of health insurance in the US seems to go up every year for the same level of care, but you get choices -- you can choose to pay less for less generous benefits; 3) in Germany, the cost of health insurance seems to go up every year, but unless you have private insurance (which most Germans do not have), you have less flexibility as far as what level of "generosity" you can choose to pay for.

@Pamela,

Since the payments into Social Sec. have already been taxed, the receipts are (almost) non taxable. Whenever you surpass a "total income" ceiling the employers portion may get taxed though.
Another point, at retirement, Company, individual, etc. Soc.Sec. contributions cease. Contributions are only on "active income". Also, the rates for Sozial versicherung are currently approximately 19.6%, Health insurance 15.6%. In the US 6.9% (x2)
@ neocon, Medicaid is a free Government Insurance coverage for the poor along with other benefits. Kids care require a modest premium of around $15 per family.
Medicare, at age 65 is mandatory and primary. When someone retires contributions cease, since they are pre- paid for during working years at 1.9% (x2) of income. In Germany contributions into the sozial versicherung continue.

My recollection of the German system was that it was the same as those American states that have compulsory auto insurance. Some states, especially in the North East, require you to purchase an auto insurance policy before you register your car. All employers who hire workers must contribute to the Krankenkasse. Whether the contribution, or a part of the contribution, is deducted from the employee’s salary depended on what kind of benefits package the company adopts.

I do not know how many Krankenkassen that are out there. But I think there is one big one, just like Blue Cross/Blue Shield was 20 years ago.

The advantages are: 1. everyone is insured, even during a lay off. 2. The insurance is portable to the next job.

The disadvantages are: 1. Since there are now a lot of layoffs, the companies are losing money, paying the insurance of laid off workers. 2. Just like Blue Cross/Blue Shield, the Krankenkasse is overwhelmed by the cost of practicing medicine and the price of pharmaceuticals. 3. Mom and Pop businesses can’t afford the premiums and do not create jobs like small businesses do in the U.S.

A not well publicized factoid: Massachusetts has a thing called “Free Care” Free Care pays for those people who are not eligible for Medicaid, (Think illegal aliens!). This was created by Michael Dukakis just before he ran for President in 1988. (Remember he touted his health care programs on the campaign trial.) This system is well abused, but keeps Boston’s elite teaching hospitals in the black. Whenever your read about a poor third world child coming to Boston to get an operation that can only be preformed in the States, it is most likely paid for by the poor tax payers of Massachusetts. (Serve them right for voting for a moon bat congressional delegation!)

Speaking of moon bat politicians from Massachusetts: 250 Hurricane Katrina refugees are living on an old Air Force base, 10 minutes from the Kennedy compound in Hyannisport. (To my knowledge the Kennedys did not invite any refugees into their massive houses.) Yesterday, The Boston Herald reported that Katrina refugees were visiting a local strip club and were using their $2,000 vouchers to pay for drinks and to tip the strippers.

Scott H,

In Germany, you don't have a choice when it comes to choosing healthcare, at a bare minimum, you MUST choose something! That is one of the initial critical things for foreigners getting an Aufenhaltserlaubnis here in Germany, they must prove that they have healthcare. Germany doesn't want in an influx of foreigners coming to their country without healthcare.

Germany forces their people to pay for healthcare, in the same fashion that they force their people to pay for "insurance" for retirement and unemployment. In the US, most people would consider these taxes as they haven't the choice when choosing to pay for something or not.

The difference, essentially, is the semantics about what is a tax and what is insurance.

James:

In fact, in the U.S they ARE taxes. In Germany, they are not. The main difference is that the SoSe payments do not go to the government and that many people are exempt. That way, only those with jobs (minus those with high income and minus government employees, entrepreneurs, doctors, lawyers,architects, teachers, accountants, tax advisors,...) contribute to the system. The difference between SoSe a la Germany and taxes is a bit more than semantics, but let's not overstate that. it's a rotten system dating back all the way to the 1880s.

Something that has not been pointed out sufficiently, I think, is that Social Security is not for healthcare. That is funded out of two different systems. The first is Medicaid, which pays for care for the poor of whatever age. The second system is Medicare which pays for medical care past retirement age. Housing aid for those too poor to afford it is distributed in yet other programs, the most well known being Federal "section 8" housing vouchers.

If German SoSe covers all this, you'd have to compare that system somehow to the several US systems, each of which covers one specific need. I suspect that this would be a headache inducing exercise.

What we can do medically now is magic. And magic has always been expensive. Because many people in the US have their health insurance provided by their employer -- that is, have it taken out of the salary they might have gotten -- we have gotten into the sloppy thinking that it should be free. When it comes around to paying for it, we have a long list of culprits we blame for making it so expensive.

One problem is that there is a very high floor for what any insurer must cover. It is as if we insisted that everyone who buys a car must buy at least a new Mercedes. Small wonder in such a system that many would be without cars.

Thanks a lot Scott, AmericanByChoice ;)

Assistant makes a good point about the employer-provided insurance. This happens in part because of a contortion in American tax law. Basically, if you get health insurance through your employer, the employer can take a tax deduction on the premium which makes it less expensive to the employee. However, an individual employee who goes out and buys his own insurance does not get that tax deduction. Add that to the fact that group purchases of insurance are nearly always less expensive than individual purchases, and there is not much incentive for anyone who is employed by a private-sector organization to go out and buy their own insurance.

The only exception is for the self-employed, who can deduct their insurance premiums from their taxes. I worked as an independent consultant for a while in 1999, and during that time I had my own health insurance policy. The premium was more than what I had been paying at my previous employer, but it wasn't out of line for my income at the time, and I could deduct it. And the coverage was comparable. I really think that if Congress would see fit to extend tax deductability for health insurance plans to everyone, that would go a long way towards rationalizing the health-care market in the U.S., plus there would be fewer people without insurance. At the least, I'd like to see a law that would allow people to form arbitrary membership organizations (sort of like credit unions) to purchase insurance in groups, and make the cost of that tax deductable.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been posted. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Your Information

(Name is required. Email address will not be displayed with the comment.)

Mission

The Debate

Blog powered by Typepad

August 2019

Sun Mon Tue Wed Thu Fri Sat
        1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31