What you need to know about Germany’s plan to raise health insurance premiums

what happened?

In the aftermath of the Covid pandemic, Germany is struggling to close a large gap in its medical stockpile.

Health Minister Karl Lauterbach (SPD) says the statutory health insurance fund faces a deficit of 17 billion euros next year, putting Germany’s healthcare finances under serious strain.

Lauterbach said this was largely due to the previous government’s generous spending policies before and during the coronavirus crisis. Not only have we poured billions of euros into free testing, but the health system has been overwhelmed with patients during the deadliest wave of the pandemic.

To address this shortfall, the Ministry of Health has drafted a series of proposals to raise additional funding.

One of these proposals is to increase the level of health insurance premiums people have to pay each month. The funds raised will account for approximately 10% of the total relief package.

Also read: How to get the most out of Germany’s health insurance compensation system

How much more do people have to pay?

Lauterbach is pitching a 0.3% increase in monthly contributions. This would be in addition to the so-called supplementary premium currently set at a maximum of 1.3% on top of the 14.6% of the general premium paid as standard.

For those who are employed, contributions are split equally between employers and employees. So the extra 0.3% actually translates to 0.15% extra per month.

Specifically, €1.50 if your gross monthly income is €1,000, or €4.50 if your gross monthly income is €3,000.

The self-employed, who normally have to pay all their own health insurance premiums, will be at a slight disadvantage under this scheme. For every €1,000 gross profit, he is expected to pay 3 extra € per month.

Does everyone have to pay that much?

No. First, the change will only affect those who are enrolled in one of the statutory health insurance companies such as TK or his AOK. People with private insurance continue to pay the premiums set by the insurance company.

Second, unlike the general contribution of 14.6%, the statutory insurance fund has the option to decide how much of the additional contribution to claim.

So 1.6% could be the new maximum, but there’s no guarantee companies will choose to charge it. Depending on your financial situation, you may decide to keep your surcharges low and remain competitive, or instead maximize your fees to strengthen reserves or provide better service. I have.

This means that people pay a minimum premium of 14.6% of their income, but can pay a maximum premium of 16.2% (if their health insurance company chooses to charge the full additional premium). Most of the time you pay something along the way.

Also read: Reader Question: How do I change my German health insurance provider?

AOK health insurance card.Photo: Image Alliance/dpa | Karl-Joseph Hildenbrandt

What other plans do you have?

As mentioned earlier, higher health insurance contributions may only cover a fraction of the deficit. To cover the rest, Lauterbach suggests various other countermeasures, including:

more state funds

In 2023, the federal government will increase funding of the Health Insurance Fund. Instead of the usual €14.5 billion annual expenditure, the Traffic Lights Union said he will spend €16.5 billion on replenishment of the medical fund next year and provide another €1 billion in the form of interest-free loans.

money from medical stockpiles

Statutory health insurers will have to mine €4 billion in savings to cover the deficit. At the same time, €2.4 billion will be withdrawn from a pool of funds known as the “Health Fund” (Gesundheitsfond), health premiums, taxpayer funds, and other forms of insurance such as annuities.

Improving discount rates for pharmaceuticals

German law requires pharmaceutical companies to offer statutory health insurance companies a discount of at least 7% on certain types of medicines. This will raise him to 12% in one year.

Pharmacist scanning a prescription

Pharmacist scans prescription.Photo: Image Alliance/dpa | David Inderied

In addition, pharmacies must offer the insurance fund a discount of €2 per packet of prescription drugs (instead of the previous €1.77). This lasts for at least two years. Meanwhile, the moratorium on drug price increases will be extended until 2026.

Physician bonus limits

Physicians operating will no longer be given a financial incentive to take on new patients.

Is this all set in stone?

It is likely to be passed by a parliamentary vote, but not yet. So far, the Cabinet is already considering the changes, which were first discussed in parliament on Friday.

Also read: Why large families pay less for long-term care insurance in Germany

what are people saying?

Bavarian Health Minister Klaus Horeczek (CSU) criticized Lauterbach’s plan to raise health insurance premiums in an impassioned speech to the Bundestag on Friday, claiming it would “send the wrong signal” to patients. .

He also stepped in proposals to cut doctors’ bonuses for taking on new patients, arguing that this would lead to cuts in services.

But FDP health expert Andrew Ullman said Lauterbach’s plan could help avoid a contribution hike that could cost hundreds of euros a month. “It would not be responsible in times of inflation and energy crises,” he said.

Health Minister Karl Lauterbach (SPD)

Health Minister Karl Lauterbach (SPD) addresses a parliamentary debate on measures to bail out the Health Insurance Fund.Photo: Image Alliance/dpa | Annette Riedl

In a speech to Congress, Mr Lauterbach said the increase in health insurance premiums was ultimately fair because employers are expected to pay half. Defended a plan to drill into reserves. At some health insurance funds, board members “earn far more than the Federal Chancellor,” he argued.

Pointing to his proposal to shift some of the financial burden to pharmaceutical companies, SPD politicians said they would “stand up to lobby pressure” and refuse to change course. What you need to know about Germany’s plan to raise health insurance premiums

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