Germany's Health Insurance Law of 1883

Otto von Bismarck, chancellor of the German Empire, believed workers would feel bound to the state if it guaranteed them a measure of security. Alongside harsher repression, social measures were meant to take the ground from under the labor movement and bring workers into the monarchy without political concessions. Sickness insurance came first. The law was enacted on 15 June 1883.

It covered industrial workers employed for more than a week who earned no more than 2,000 marks a year, together with employees in crafts and trade. Workers paid two thirds of the contributions and employers one third. When a member fell ill, the fund paid for the doctor and the medicines and, from the third day of illness, paid sick pay of half the average wage for up to 13 weeks.

Bismarck built on what already existed, folding workers' mutual-aid societies and company schemes into a patchwork of sickness funds. In 1885 about 10 percent of the population was insured, spread across 18,776 funds. Employers and workers sat on each fund's administrative board in proportion to their contributions, and the board set the contribution rate and any optional benefits. The law said nothing about how funds should deal with physicians or which practitioners counted as qualified, leaving both to the funds.

Accident insurance followed in 1884 and old-age and disability insurance in 1889. Coverage reached white-collar workers in 1901, unemployment insurance came in 1927, and by 1960 83 percent of West Germans were insured through 2,028 funds. The WHO's European Observatory describes Germany as widely regarded as the first country with a national system of social health insurance.

Germany's health ministry now puts statutory coverage at about 88 percent of the population, spread across many independent sickness funds that members can choose between.