International Public Policy:
Retirement and Health Care
WEBSITE VERSION OF RESEARCH
(Includes links to the resources)
CHILE
GERMANY
JAPAN
CHILE
General Characteristics and Demographics
Chile is located in Southern America and has a population of 15 million people. The life expectancy is 79 years old.
For more information on Chile’s profile, please visit the following link:
Social Security System
Chile was one of the first countries in Americas to establish state sponsored social security coverage. The system was poorly managed with a deficit of 25% of GDP and there was a lack of uniformity. The system had over 150 different retirement regimes for various occupations and 35 different pension funds. As a result, employers and employees in 1973 had to contribute between 16% and 26% of the wages.
For more information on Social Security in Chile, please visit the following links:
New Privatized Individual Account
Chile was the first country to replace its social security system with individual accounts in 1981 due to the ineffectiveness of its social security system. Workers must contribute at least 10% of their wages in the new system. The new pension system is managed by pension fund companies and they have achieved a real rate of return of 10.9% since 1981 and have accumulated $36 billion in assets. Although the new retirement system is performing extremely well, there are some drawbacks such expenses and fees, volatility in the system, underreporting, and inadequate coverage.
For more information on Private Pension in Chile, please visit the following links:
Health Insurance
Public health system in Chile began in 1890. The health system was redesigned in 1980 and 1981 due to the intimate tied with the social security system. The current health system is mainly managed by public health companies known as FONASA and private health insurance companies known as ISAPRE.
For more information on Current Health Insurance management in Chile, please visit the following links:
Some of the issues with the current health system are a 500% increased in lawsuits alleging medical negligence and an aging population in Chile will be a great concern for the nation.
Above is a graph showing the current population in Chile is still young and healthy. Unfortunately, there will be a problem with the health system in 2025 when the population starts aging according to the graph below.
For more information on Current Issues in Health Insurance in Chile, please visit the following links:
GERMANY
General Characteristics and Demographics
Like all other countries around the world, the aging population is increasing at rapid rates, while the birth rate is quickly declining. Currently Germany has 82.5 million inhabitants in an area of about 220,000 miles, which breaks down to a population density of about 230 per square kilometers.
Germany is a federal republic consisting of 16 states, known in Germany as Länder. Each of the states has a constitution which must be consistent with the republican, democratic, and social principles embodied in the constitution, which is known as the Basic Law or Grundgesetz. The constitutionally defined bodies, which have primarily legislative functions, are the lower and upper chambers of the federal parliament, namely the Federal Assembly (Bundestag) and the Federal Council (Bundesrat). The Federal Assembly mainly oversees the Federal Ministry of Health and deals with proposals for health reform acts. The Federal Council mainly oversees the State Ministries responsible for representation of health care.
For more information on Germany and Its Demographics please visit the following links:
Social Security System
The citizens of Germany believe in need to protect everyone from economic and social need. This protection is provided by a system of social insurance which citizens contribute to according to their incomes with the understanding that they may someday need its assistance. There are three types of entitlement programs in Germany: contributory social insurance programs, noncontributory social compensation program, and social welfare program.
For more information on Social Entitlement Programs in Germany and their historic development, please visit the following link:
There are currently five social insurance programs in Germany: pension, medical, worker’s accident compensation, unemployment and long-term care insurance.
For more information on Social Insurance Programs in Germany and their coverage, please visit the following links:
Pensions
Pension insurance has been a financial security for German’s in their old-age. All white-collar, blue-collar workers, along with trainees, disabled people, military servants, and civil servants are insured. The pension system is a complex system that has many rules, regulations, and calculations. As of January 2002 pensions are funded out of contributions made equally by employers and employees at a rate of 19.1 percent of the employees gross monthly wages. Contributions have assessment limits of 4500 EUR in Western Germany and 3750 EUR in Eastern Germany
For more information on the Types of Pensions in Germany, its eligibility requirements and calculation, please visit the following links:
There are several current issues regarding the pension system in Germany: increase in life-expectancy is causing individuals draw pensions longer; approval of putting a mandatory 2.5% of wages into individual savings accounts as the foundation of a funded system; approval of cutting pensions over the next quarter of a century.
For information on Current Issues of Pension System, please visit the following links:
Health Insurance
There are two basic health insurance types in Germany: Statutory Health Benefit and Private Health Insurance.
The main function of the Statutory funds is for the prevention, early detection, and treatment of diseases, medical rehabilitation, payment of sickness benefits, pregnancy/maternity benefits, and health promotion. Statutory health insurance premiums vary and are set upon an individual’s earnings rather than risk factors (age, sex, and marital status).
German citizen can choose to have Private Health Insurance which can provide better benefits or even more benefits than the Statutory Health Insurance.Individuals may wish to combine the insurance if they feel that additional treatment maybe be needed that is not covered by the statutory insurance. The premiums for the combined insurances depend on the benefits chosen by the individual.
For more information on the Types of Health Insurance in Germany and Eligibility Requirements, please visit the following links:
German citizens do have the option to choose between two types of insurance benefits, the Statutory health insurance and the Private health insurance. But due to the mandatory law of health coverage Germany has one of the highest levels of health care spending in the world. According to the Organization for Economic Cooperation and Development, the country spent $222 billion, roughly 10.7% of their GDP on health care alone in the year 2001.
For more information on the Health Insurance Expenditures in Germany and Its Current Issues, please visit the following links:
JAPAN
General Characteristics and Demographics
The population of this country is currently about 129 million. Japan has experienced a phenomenal growth rate during the past 100 years as a result of scientific, industrial, and sociological changes, but this has recently slowed because of falling birth rates. High sanitary and health standards produce a life expectancy exceeding that of the United States. The low fertility rate, combined with high life expectancy, is making Japan a rapidly aging society, placing an increasing burden on the shrinking working-age population.
For more information on Japan and its demographics please visit the following links:
As Japan's population aged, so did its work force. In 1995 about 20 percent of the work force was made up of workers aged 55 and over. The Ministry of Labor predicted that by 2000 about 24 percent of the working population (almost 1 in 4 workers) would be in this age-group.
For more information on Labor in Japan, please visit the following link:
Social Security System
In Japan, the word "social security" began to be generally accepted after it was used in the provisions of the Constitution of Japan created in November 1946. The Ministry of Health and Welfare was established in January 1938 as a new ministry to supervise health, social welfare/insurance and labor administration. Term "social security" in the Government of Japan means a range of social policies for the welfare state: its scope is wider than in some countries and includes public health care. Ministry of Health and Welfare and Ministry of Labor are involved with providing SS services.
For more information on Social Security in Japan, please visit the following links:
Japan's social security benefit expenditures has been rapidly increasing due to the improvement of the social security system brought during the period from the postwar confusion through the high economic growth as well is quickly increasing numbers of aging people.
For graphs and more information on SS expenditures in Japan, visit the following links:
Pensions
The Japanese pension system is multi-structured, consisting of public and private pension plans. The distinction between public and private pensions depends on whether the insurer of pensions is the government.
For more information on the Types of Pensions in Japan, please visit the following links:
As Japan's population ages, the financial health of the public pension plan worsens. To avoid massive increases in premiums, the government reformed the system in 1986 by cutting benefit levels and raising the plan's specified age at which benefits began from 60 to 65. Under the revised system, contributions paid in equal share by employer and employee were expected to be equivalent to about 30% of wages, as opposed to 40% of wages under the old system.
For information on Financing Japanese Pensions, please visit the following links:
For information on Corporate Optional Plans, please visit the following links:
There are several current issues in Japan regarding pension structure. Those includefinancial crisis of public pension caused by sluggish economy and change in demographics; non-compliance and default in National Pension; recent reforms toward shifting from DB Pension Plans to DC in the private pensions; and changing employment patterns and life cycles.
For information on Current Issues of Pension System, please visit the following links:
Health Insurance
Japan is known for the efficient health care that is provided to every citizen of the country and the foreigners that reside there. Most of the health services are provided through the public health insurance system. The health care system is rather simple and can be divided in two major groups of beneficiaries: employees and their dependents (65 percent of the population) and self-employed, unemployed, elderly and their dependents (35 percent of the population).
Types of health insurance in Japan:
Government-managed health insurance
Society-managed health insurance
National health insurance
Mutual aid associations
For more information on the types of health insurance in Japan and their general characteristics, please visit the following links:
Japan’s health expenditure is low compared with major developed countries. The annual spending represents $265 billion a year, roughly 6% of GDP, while United States spent 14% of GDP on health care in 1999. Japanese universal coverage is considered the most efficient among any of the developed countries.
For information on the health insurance expenditures in Japan, please visit the following link:
Current Issues in Health Insurance in Japan include the following problems: rapid aging population; fraud by medical providers and use of pharmaceutical products; increased demand for quality health care and current regulations of foreign health providers; competition between hospitals and physicians.
For information on Current Issues of Health Insurance in Japan, please visit the following links:
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