Health Insurance


Germany has the oldest health insurance system, the Sickness Insurance Law of 1883. Employers paid one-third and employees two-thirds. The insurance covered both medical treatment and sick leave. In 1911, the UK created basic health insurance. Russia followed in 1912, nationalizing all healthcare after the Russian Revolution of 1917.

Most countries rolled out some form of Universal Healthcare Coverage after WWI. Some countries for care directly, including the UK and Canada. There are no co-pays.

France created a hybrid system. The government program pays for basic care. However, individuals are obligated to purchase supplemental policies from private non-profits insurance companies. Most French doctors and clinics are private whereas most hospitals are government-owned. Many service providers require out-of-pocket payment which is reimbursed, via a single-payer system, to the patient’s bank account.

Switzerland is entirely private but people must purchase healthcare policies.

Regulation of Medical Costs

All countries, besides the United States, regulate rates for care and medicine. For example, in France’s semi-privatized system, the government sets a reimbursement rate for ordinary physician visits. Doctors may charge more and patients pay out-of-pocket or have a supplemental policy which pays all or part of the different.

Health Insurance in the United States

The United States took a different approach than the rest of the world, leaving most people covered by entirely private loosely regulated insurance plans. There are government programs for the elderly and poor people. Government workers, including soldiers, enjoy health coverage. Government retirement plans usually include high-quality health coverage. However, the vast majority of Americans carry private insurance or are uninsured.

US law prevents the US government from negotiating lower drug prices, legalizing price gauging. Drugs in the USA routinely cost many times what the same drug, from the same manufacturer, produced in the same factory, costs in Europe.

Finally, US health insurers are exempt from antitrust law. That is, they may openly and legally collude with one another to drive up prices and profits.

These provisions create an extremely expensive healthcare system in the US. Besides the obvious problems, American healthcare providers spend an enormous amount on overhead trying to negotiate with the myriad of healthcare providers. Additionally, healthcare providers spend enormous sums trying to minimize prices. None of this leads to better care.

In 2016, the United States spent 17.2% of GDP on healthcare, compared to 8.9% of the 36 OECD countries. However, American healthcare outcomes are mediocre at best.