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HEALTH

German Health Minister plans to raise health insurance costs

Health Minister Karl Lauterbach says the German government needs to address the huge deficit of statutory health insurance organisations, with plans to raise contributions paid by insured people in Germany.

A selection of German health insurance cards.
A selection of German health insurance cards. Photo: picture alliance/dpa | Jens Kalaene

Germany’s statutory health insurance companies expect to face a shortfall of €17 billion next year.

In order to close this financing gap, Health Minister Lauterbach is planning to increase the contributions of those insured.

Addressing the deficit in an interview with the Neue Osnabrücker Zeitung, Lauterbach said: “We have to turn four screws: we have to raise efficiency reserves in the health system, use reserves in the health insurance funds, grant additional federal subsidies, and raise contributions.”

The politician, who belongs to the centre-left Social Democrats, did not give an idea of how much contributions would go up. “It would be unprofessional for me to report to you here from the ongoing talks,” he said. 

READ ALSO: How to make the most of reward schemes on your German health insurance

At the moment the cost of public health insurance in Germany amounts to 14.6 percent of gross income. For employees, the employer pays half of the contribution rate.

A reduced rate of 14 percent applies to people not entitled to sick pay like those who are self-employed.

On top of that, health insurance providers set an additional contribution. As The Local has reported, several health insurance organisations have increased their own contribution rates, particularly since the Covid-19 pandemic began.

Around 86 percent of the German population is covered by by statutory health insurance.

As well as the pandemic putting a massive strain on the system, health insurance companies have also been dealing with expensive reforms aimed at modernising Germany’s healthcare system.

According to the Association of Statutory Health Insurance Funds (Spitzenverband Bund der Krankenkassen or GKV), providers will be short of around €17 billion in 2023.

Insurers and opposition parties are calling for clarity on where the money will come from, but the Health Minister urged patience. “I will present a well-considered bill in time,” said Lauterbach. 

The minister stressed however that “lobby interests will not play a role in the restructuring of the health insurance finances”.

Meanwhile, Lauterbach said that “in a few weeks” he would name members for an expert commission on the reform of German hospitals.

Lauterbach said of the commission’s mandate: “The quality of care must be improved and it must become more efficient. And we must ensure security of care despite extreme staff shortages.”

He said that Germany is heading towards a situation “in which we have too few nurses and too few doctors in many regions. We have to find answers to this.”

At the beginning of the week, Lauterbach made it clear in an interview with the Tagesspiegel newspaper that there will be no cuts in benefits for medical care despite the financial gap. “I have made a commitment: I will not cut anything,” he said.

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ENERGY

Should tenants in Germany be shielded from energy price hikes?

Gas prices have more than tripled in the past year, prompting tenants' rights advocates to call for more social support and a cap on energy costs.

Should tenants in Germany be shielded from energy price hikes?

The German’s Tenants’ Association is calling on the government to put together a new energy relief package to help renters deal with spiralling energy costs.

Gas has become an increasing scarce resource in Germany, with the Economics Ministry raising the alert level recently after Russia docked supplies by 60 percent.

The continued supply issues have caused prices to skyrocket. According to the German import prices published on Thursday, natural gas was three times as expensive in May 2022 as it was in May a year ago.

In light of the exploding prices, the German Tenants’ Association is putting the government under pressure to offer greater relief for renters.

READ ALSO: 

Proposals on the table include a moratorium on terminating tenancy agreements and a permanent heating cost subsidy for all low-income households.

The Tenants’ Association has argued that nobody should face eviction for being unable to cope with soaring bills and is urging the government to adjust housing benefits in line with the higher prices. 

Gas price cap

Renters’ advocates have also joined a chorus of people advocating for a cap on consumer gas prices to prevent costs from rising indefinitely.

Recently, Frank Bsirske, a member of the parliamentary Green Party and former head of the trade union Verdi, spoke out in favour of capping prices. Bavaria’s economics minister and Lower Saxony’s energy minister have also advocated for a gas price cap in the past. 

According to the tenants’ association, the vast majority of tenants use gas for heating and are directly affected by recent price increases.

At the G7 summit in Bavaria this week, leaders of the developed nations discussed plans for a coordinated cut in oil prices to prevent Russia from reaping the rewards of the energy crisis. 

In an initiative spearheaded by the US, the group of rich nations agreed to task ministers will developing a proposal that would see consumer countries refusing to pay more than a set price for oil imports from Russia.

READ ALSO: Germany and G7 to ‘develop a price cap’ on Russian oil

A gas price cap would likely be carried out on a more national level, with the government regulating how much of their costs energy companies can pass onto consumers. 

Strict contract laws preventing sudden price hikes mean that tenants in Germany are unlikely to feel the full force of the rising gas prices this year

However, the Tenant’s Association pointed out that, if there is a significant reduction in gas imports, the Federal Network Agency could activate an emergency clause known as the price adjustment clause.

This would allow gas suppliers to pass on higher prices to their customers at short notice. 

The Tenants’ Association has warned that the consequences of an immediate market price adjustment, if it happens, should be legally regulated and socially cushioned.

In the case of the price adjustment clause being activated, the government would have to regulate the costs that companies were allowed to pass onto consumers to prevent social upheaval. 

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