I don't know if I would understand the German "insurance" system from that explanation. Maybe to complement your explanation another try at it:
Germany has two insurance-like systems to pay for medical treatments:
(1) insurances, with fees aligned with damage risk associated with the policy holder.
(2) a system of "funds" that provide insurance benefits for insurants, however, are not organized like an insurance.
The system (2) is quite old (dating back to the 19th century) and has a few peculiarities:
* fees vary by income of the member of the fund (principle of solidarity, basically people with well paying jobs subsidise others).
* half of the fee for a member is payed by the employer, half by the employee, deducted from the paycheck.
* family members can be insured, too, without increasing fees.
* fees are not dependent on your risk, i.e. they do not increase with age, preexisting conditions, etc.
The alternative to this fund are insurances that work on a risk-based pricing scheme - item (1) in the list:
* in order to be able to sign up for them, you need to have a certain steady income above a threshold (above 50000 EUR I believe).
* pricing is per insurant, i.e. extra insurance contributions for kids and family members if they are on the same plan, etc.
* for young adults these plans are usually cheaper than for older people, which means you can get "trapped" in a contract that is more expensive than the public funds I wrote about above.
For both systems, treatment prices are kind of fixed (as a rule of thumb, doctors can charge the insurance a bit more than the public funds, by a constant factor of 2-3, but I heard from doctors that this depends on the treatment).
Germany has two insurance-like systems to pay for medical treatments:
(1) insurances, with fees aligned with damage risk associated with the policy holder. (2) a system of "funds" that provide insurance benefits for insurants, however, are not organized like an insurance.
The system (2) is quite old (dating back to the 19th century) and has a few peculiarities:
* fees vary by income of the member of the fund (principle of solidarity, basically people with well paying jobs subsidise others). * half of the fee for a member is payed by the employer, half by the employee, deducted from the paycheck. * family members can be insured, too, without increasing fees. * fees are not dependent on your risk, i.e. they do not increase with age, preexisting conditions, etc.
The alternative to this fund are insurances that work on a risk-based pricing scheme - item (1) in the list:
* in order to be able to sign up for them, you need to have a certain steady income above a threshold (above 50000 EUR I believe). * pricing is per insurant, i.e. extra insurance contributions for kids and family members if they are on the same plan, etc. * for young adults these plans are usually cheaper than for older people, which means you can get "trapped" in a contract that is more expensive than the public funds I wrote about above.
For both systems, treatment prices are kind of fixed (as a rule of thumb, doctors can charge the insurance a bit more than the public funds, by a constant factor of 2-3, but I heard from doctors that this depends on the treatment).