New Age | Social health insurance scheme

ADVOCACY for initiating a general practitioner-based primary health care system, practised in the United Kingdom and in many former British colonies, looks quite rife in Bangladesh whereas the financing avenue urged for the same is the social health insurance-based model, known also as the Bismarck model, initiated in Germany in 1883. The Bismarck model, the oldest insurance system globally, is based on insurance premiums that are paid partly by owners of formal sector enterprises and partly by their workers for obtaining medical care. The government establishes a central insurance fund that collects contributions from employers and employees. This fund is used to reimburse healthcare providers for the services that they render to the insured individuals.

The social health insurance model operates, as a social right of the people, based on the principle of solidarity, as individual contributions put to a common insurance fund are according to the individual ability to pay, ie as per the range of their income. Actually, the percentage that is paid as a premium is 14.6 per cent of the income of an individual, a half of which is paid by the employers and the other half by the employees. The Bismarck model, obviously, does not cover medical care for those who are not in the formal sectors.

Although 14.6 per cent of the salary of an individual is charged as a premium, the average national contribution across all public insurers in 2021, for the services they received, stood at one per cent, on top of which everyone paid, however, €10–15 for their first medical visit every quarter. On average, the premium of the insured stood at €150 to 500 per month or more. Besides, the public health insurance companies may also charge their own contribution rates that fluctuate each year.

As of 2023, all employed residents who earned between €520 and €5,550 a month were mandated for social health insurance. Public, ie state, insurance covers 90 per cent of the Germans; the rest hold private insurance, and overall, only 0.1 per cent of the German population remains out of insurance coverage. It is worthwhile to note that Germany is the highest spender on health care in Europe, at 12.8 per cent of its gross domestic product, which is about €5,000 per citizen per year. Under the social health insurance scheme, individuals are required to enrol in a social health insurance scheme, available in many varied forms, as per eligibility and make regular contributions.

The government often mandates participation in these programmes to ensure that the risk pool is large enough to cover the healthcare needs of the entire population. Needless to say, this approach hinges on a feeling of camaraderie and a high level of income to share and pool risk. Health insurance premiums are partially tax-deductible in Germany, which incentivises payment of premiums by the rich. The insurance funds may also be administered by nonprofit organisations besides the government agencies. These include collecting contributions, managing the funds, and reimbursing healthcare providers.

This, in effect, means that private scheme operators across Germany may also manage public health insurance plans; while the healthcare providers themselves are usually private entities, including hospitals, clinics, and physicians. The fund management reviews the claims and reimburses the providers based on predetermined fee schedules or negotiated rates. Germany has 110 such public sickness funds with different spans and reaches of services and providers by categories and beneficiaries.

The government plays a significant role in regulating and overseeing the healthcare system and healthcare provision in the social health insurance model. It establishes the legal framework of care and performance, sets standards of services, and ensures the financial sustainability of the insurance funds, while service is purchased and paid by a third party, the insurers. In the Beveridge, British National Health Service, model, on the other hand, the government has a more direct role in ensuring healthcare services, as it operates the healthcare facilities and employs healthcare professionals directly at different nodal tiers through local public purchasers and payers of care.

Retirees and unemployed residents are covered through state funding in the social health insurance scheme. Special rules are applied for self-employed persons and university students. In certain conditions, family co-insurance may be bought to extend coverage to the spouses, civil partners, and children, up to age 23, or 25 if studying. Those who receive unemployment benefits or a German pension, including retirees, are also covered under the public healthcare system.

While an individual can only sign up with any one scheme at a time and most statutory health insurance funds are open to everyone, private insurance, however, is urged if the healthcare cost of an individual is high or if a patient does not speak the German language. Interestingly enough, an employer may contribute to one’s private plan costs as well. Some private insurance schemes are availed by publicly insured people to top up coverage to help with costs not paid by the state system. High-income earners, freelancers, self-employed workers, civil servants, international students over the age of 30, and visitors have to take private health insurance mandatorily.

Visitors have to pay an additional amount for covering family members. Non-residents, as well as students over 30 and PhD candidates, need to have private insurance coverage to access healthcare. Temporary visitors to Germany need to pay for treatment and claim reimbursement later, if insured (privately). In the case of private insurance, medical bills are paid by the service recipients at the time of accessing the service, which the insurance company reimburses later. Medical bills, on the other hand, are covered by the state at the time of service if it is a publicly managed insurance.

Ninety-five per cent of benefits are the same across all public insurance companies, as mandated by law. While social health insurance, in general, covers outpatient care, hospitalisation and emergency care, the state/public health insurance covers everything from medical emergencies to prenatal services. Everyone covered under German public healthcare has access to vaccines, maternity care, and medication, which occasionally require a co-payment. Based on the scale of premium, the private insurance system may cover more services than the public insurance system. However, private insurers may only provide maternity coverage if the premium holders have selected it.

Public health insurance covers the recommended screenings for cervical cancer with a Pap test after age 20 and breast cancer by mammogram after age 50. Public health insurance covers children’s medical care free of charge until age 18. Paediatricians are accessible through the German healthcare system without a referral. Paediatricians treat children from birth until age 12, when they transfer to a general doctor. Children and young people up to age 18 do not pay for dental treatment. However, this may not be provided universally. The private insurers do not fully reimburse for all dental treatments, while its cost in Germany is extremely high. While routine procedures are covered, more extensive work, such as dentures and crowns, is only partially reimbursed. State health care covers dentistry, eye care, and alternative medicine, but with co-payments required and some limitations on treatment.

Mental health care, such as therapy, is also available under state health care for up to a certain number of treatment sessions per year. The state healthcare schemes have different premium rates for these services. Sickness benefit is a form of social security included under the German state healthcare system. This allows an insured to collect full wages for up to six weeks of sickness, and 70 per cent of payment starting from the seventh week.

An insurance holder is given a health insurance card, Gesundheitskarte, which will have to be shown each time a patient visits a German doctor or dentist. Since 2014, an electronic eHealth card with a photo of the holder, unless under 15, is considered as proof of entitlement to medical services and benefits. Providers scan this card that contains the patient’s name, date of birth, address, and health insurance data each time the patient visits a medical service centre. A patient will need a referral from her/his primary doctor to see specialists, although some consultants may be visited directly with an earlier booking, eg gynaecologists.

Their services would include contraception, cancer screenings, and sexually transmitted infections. They also provide care and support during pregnancy, possibly with the help of a midwife or obstetrician. The Bundesministerium für Gesundheit is responsible for developing social healthcare policy in Germany. The Gemeinsamer Bundesausschuss regulates the German medical sector, including doctors, hospitals, and pharmaceuticals.

As may be surmised from the above narratives, the social health insurance is, in fact, quite varied and complicated by the types and extents of services, benefits, and beneficiaries, and also purchasers and providers of care and the premium rates. This multifariousness is apt to increase the administrative costs of managing these varieties of care by its extent and the necessity of differentials in monitoring and supervisory instruments and processes to be pursued. It will be complex on several counts. First, it will be a new notion and hence not easy to understand its ramifications in Bangladesh’s socio-economic milieu, which underscores our value system and transparency; Second, how the public health facilities would be brought under this scheme cannot be fathomed with currently ingrained intuitional arrangements, concepts, and experiences. And, third, the multifariousness of management units, rates, and enlistments fiducial assurance will be a daunting challenge. Also, with less than 15 per cent of the population working in the formal sector, the risk pool for covering the other 85 per cent would be too small to effectuate and be efficient. It would not be irrational to think that compared to the social health insurance scheme, the relatively recent models of health financing, such as the Beveridge Model, might be more feasible and easier to apply and manage.

Abu Muhammad Zakir Hussain is chair of the Community Clinic Health Assistance Trust and a member of the health sector reform commission.