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REVIEW & OUTLOOK
The Stressed German Model
Wall Street Journal, October 10, 2009
It took the Germans 125 years to figure out that their health-care system doesn't work.
What if the Obama health-care proposal turned out to be the biggest public-policy mistake in 125 years?
Yesterday, these columns discussed the Congressional Budget Office's efforts to push the square peg of the Obama plan through the round hole of affordability. Meanwhile in Germany, often cited by American liberals as the "model" of a well-run health-care plan, the political debate is running in the opposite direction. Chancellor Angela Merkel's new coalition partner, the Free Democratic Party, is pressing her to claw back the state's participation in a system that now insures nine of 10 Germans.
Germany's health-care system was brought to life in 1883 by Otto von Bismarck and became the model for virtually every such state-directed national insurance plan since. Alas, the German system is starting to come apart at the financial seams. Germany's system relies on a handful of state-supported health insurers. This week they informed the government that the system was on the brink of a financial shortfall equal to nearly $11 billion.
Pointedly, the insurers made clear that cutbacks alone won't solve the problem. They said the government would have to consider raising premiums on the insured or, you guessed it, raise taxes. Currently, German workers pay a fixed-rate premium into the insurance scheme; that rate is now set at 14.9% of gross pay.
Chancellor Merkel, something of a political acrobat, was previously allied in coalition with leftist Social Democrats. She's now resisting calls from the Free Democrats to get off the state-pulled health-care train. The FDP's spokesman on health, Daniel Bahr, wants a "shift in direction away from state-run medicine." Why? Because "the current financial figures have showed us that the health-care fund doesn't work."
With Congress inching ever closer to passing a greater federal presence in providing health insurance under ObamaCare, let's hope it doesn't take the U.S. until the year 2134 to figure out it isn't working.
Printed in The Wall Street Journal, page A14
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