Chancellor Otto von Bismarck's Health Insurance Act of 1883 established the first social health insurance system in the world. At the beginning, health insurance coverage was restricted to blue-collar workers. In 1885, 10 percent of the population was insured and entitled to cash benefits in case of illness (50% of wages for a maximum of 13 weeks), death, or childbirth. While initially limited, coverage gradually expanded. The final step toward universal health coverage occurred in 2007, when health insurance, either statutory or private, was mandated for all citizens and permanent residents. Today’s system provides coverage for the entire population, along with a generous benefit package. Since 2009, everyone who is a resident in Germany has been legally required to have health insurance, including, in most cases, foreign researchers and scientists. Under the law, all residents must have a policy with an insurance provider (called a Krankenkasse in German) that offers at least the minimum level of coverage permitted.

Health insurance is provided by two subsystems: statutory health insurance (SHI), consisting of competing, not-for-profit, nongovernmental health insurance plans known as sickness funds; and private health insurance.

The German health care system is notable for the sharing of decision-making powers among the federal and state governments and self-regulated organizations of payers and providers (see exhibit).

Within Germany’s legal framework, the federal government has wide-ranging regulatory power over health care but is not directly involved in care delivery. The Federal Joint Committee, which is supervised by the Federal Ministry of Health, determines the services to be covered by sickness funds. To the extent possible, coverage decisions are based on evidence from comparative-effectiveness reviews and health technology (benefit-risk) assessments.

The Federal Joint Committee also sets quality measures for providers and regulates ambulatory care capacity (the number of SHI-contracted physicians practicing), using needs-based population–physician ratios.

Regional associations of SHI-contracted physicians are required by law to guarantee the local availability of ambulatory services for all specialties in urban and rural areas. These regional associations also negotiate ambulatory physicians’ fee schedules with sickness funds.

 In 2017, total health expenditures made up 11.5 percent of the gross domestic product (GDP). Of this health spending, 74 percent was publicly funded, and most of that spending (57% of total) went toward SHI.

About 88 percent of the population receives primary coverage through sickness funds, and 11 percent through private insurance. There were 109 sickness funds in January 2019.1

As of 2019, all employed citizens (and other groups such as pensioners) earning less than EUR 60,750 (USD77,985) per year are mandatorily covered by SHI. Individuals whose gross wages exceed the threshold, as well as the self-employed who were previously covered by SHI, can elect to remain in the publicly financed scheme (as 75% do) or to purchase substitutive private health insurance. Civil se rvants are exempt from SHI; their private insurance costs are partly refunded by their employer. Military members, police, and other public-sector employees are covered under small programs that are separat e from SHI. Visitors are not covered through German SHI. Refugees and undocumented immigrants are covered by social security in cases of acute illness and pain, as well as pregnancy and childbirth.

The child care system in Germany can be seen as universal in coverage, though regulations may vary from Land to Land, and between west Germany and east Germany. It is viewed as a public problem shared by multiple roles of the society: parents, regional and local governments, non-profit organizations (usually churches) etc. Germany offers a wide range of child care programs for parents: day care centers (Krippe) for children up to age 3, preschool programs (Kindergarten) for children from age 3 to 6, primary schools (Hort) for school-age children. Around ninety-eight per cent of German daycare is non-for-profit and is heavily funded by the government. Ninety per cent of the costs are paid by state, regional and local governments through public taxes while the rest of the cost is paid by the parents.[18] In western Germany, regulations of day care are enforced by state youth office (Landesjugendamt) in each Land, which distributes funds to day care centers according to a certain amount. Even though the enforcement is in a relatively decentralized form, there is still high conformity on regulatory requirements of the day care centers among different Land . For example, child/staff ratios vary from 17/1 to 25/1; group sizes of 25 in kindergartens; and training requirements for teachers. German child care system values highly of the quality of teaching staffs. In every German Land, a teacher must complete four to five years of training requirements, usually composed of one to two years of praktikum, two years of college, and one year of additional praktikum (Berufspraktikum).The tougher regulation on teachers' training requirements ensures the quality of child care service to some extent. There is no big market for private day care in Germany. Only 4% to 10% of mothers employ child minders (Tagespflege) in 1995. The main reason for this is that private child care providers cannot maintain profitability when facing the competition from the public providers which are generously funded by the government. And the high barrier to enter the market set by the government becomes one of the hinders.