After days of wrangling with public insurance providers, the German government has warned that health insurance premiums are set to spike for millions of Germans next year.
The deal will affect more than 200 public health insurers, taking contributions from a current average of 14.92 percent of gross pay to at least 15.5 percent. Health insurance contributions are generally borne roughly equally by salaried workers and their employers in Germany.
The common health premium is part of a broader healthcare reform package by the government. The idea is that the common premium along with a tax subsidy will flow into a common health fund from which the insurers in future will receive a basic sum to cover their customers.
What remains undisputed is that millions of Germans will have to pay more each month for healthcare starting Jan, 2009. Some estimates suggest monthly contribution could rise by as much as 21 euros.
The reform has sparked anger among labour unions and employer groups while some public health insurance providers say the deal doesn't go far enough in the light of rising prices for medicines and health services.
"The row shows that the health fund is a flawed construct and that politics should not interefere in health care premiums," said Daniel Bahr, healthcare expert from the opposition pro-business FDP.
Herbert Rebscher, head of the DAK health insurance provider said the reform kept the entire public health insurance system groping in the dark because nobody knew how the revenues from the planned health fund would be used. A common across-the-board health premium would damage the economy and competition, Rebscher said.
"Competition among companies means that companies set their own prices and the state doesn't force them to set a common price," he said, adding that the result would be a catastrophic decline in the quality of healthcare for customers since insurance providers would try to save every penny.