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MONEY

Why large families are set to pay less for German care insurance

Germany's highest court has issued a landmark ruling stating that families with lots of children should ultimately pay less for their social security. Here's what you need to know.

Children eat ice cream in Berlin.
Children eat ice cream in Berlin. Photo: picture alliance/dpa | Annette Riedl

What’s going on? 

On Wednesday, the Constitutional Court in Karlsruhe ruled that parents with more than one child should pay a reduced rate of care insurance compared to people with fewer children – or those with none at all.

The case had been brought by 376 families in a campaign called Elternklage (Parents’ Complaint), who were supported by the Family Federation of Catholics in the Archdiocese of Freiburg. The families had argued that the amount of health insurance, pension insurance and care insurance they pay should be directly linked to the number of children they have.

Since raising a family costs time and money, this contribution to society should be taken into account when setting insurance rates and people with more children should pay lower contributions, the parents argued. 

What does the current law say? 

At present, Pflegeversicherung (care insurance) – a type of social security designed to fund care in old age – is already paid at different rates by parents and non-parents. Since the beginning of 2022, people without children pay 3.4 percent of their income towards social care, while parents pay 3.05 percent of their income.

The decision to have two different rates dates back to an earlier court ruling from 2001. At the time, the judges decided that charging people with children and those without the same amount of care insurance went against the Basic Law. This is because, in the view of the judge, parents pay a “generative contribution to the functioning of a pay-as-you-go social security system”, since their children pay back into the pot later in the life. The two-tiered system for people with and without children was adopted shortly afterwards.

At the same time, however, the judges ruled against a reduction in pension or health insurance contributions for parents. They said it was legitimate for the state to subsidise parents in other ways, such as through free education or topping up the pensions of people who had raised a family. 

READ ALSO: EXPLAINED: Who pays the most German tax and who benefits the most?

So if parents already pay less, what’s the problem?

According to the plaintiffs, the 2001 ruling made a false equivalence between small and large families and didn’t fully take into account the loss of income, time and cost associated with raising kids. 

The lawyers argued that the plaintiffs suffered a double loss of earnings when raising their children and looking after the older generation, and pointed to the fact that women’s pensions are often much lower than men due to time spent bringing up children.

The Catholic Family Federation also suggested that families didn’t really receive free healthcare for their children. That’s because the parents’ contributions are only assessed on their overall earnings, which means that the number of children they have and the costs associated with that aren’t taken into account.

READ ALSO: What you need to know about Germany’s new parental benefits reforms

The Constitutional Court in Karlsruhe.

The Constitutional Court in Karlsruhe. Photo: picture alliance/dpa | Uli Deck

And what were the counterarguments? 

Arguing against the constitutional complaint, a spokesperson for the Health Ministry said the costs associated with bringing up a child should be shouldered by society as a whole rather than any given insurance fund.

The National Association of Statutory Health Insurance Funds (GKV) pointed out that children may not necessarily grow up and pay into the same insurance pot that their parents’ did, making it hard to calculate parents’ contributions based on their children’s future ones. Some children may grow up and move abroad, which would mean they would pay into a different pension or health insurance fund entirely, they pointed out. 

The GKV advocated for reimbursing parents through child benefits rather than through reductions in insurance contributions. 

READ ALSO: What you need to know about the complicated world of German insurance

Did the judges agree with the plaintiffs? 

Partly – but only on the care insurance issue. According to the judges, the 2001 ruling didn’t go far enough in taking into account the number of children in a family. The more children a family has, the greater the effort and the associated costs for parents, they wrote in a statement announcing the ruling.

“This disadvantage occurs even from the second child,” the statement reads. “Charging the same contribution rate to parents regardless of the number of children they have is not constitutionally justified.” 

School pupils in a German classroom

School children sit in a classroom in Neckartailfingen, Baden-Württemberg. Photo: picture alliance/dpa | Marijan Murat

On health insurance and pensions, however, they disagreed with the plaintiffs. 

They said that time taken out by parents to look after children was already factored into the statutory pensions system and pointed to the fact that people benefit from free healthcare as a teenager and child as part of their parents’ health insurance plans. 

READ ALSO: Ehegattensplitting: How did Germany’s marriage tax law become so controversial?

What happens now? 

The court has given the government until July 31st 2023 to introduce a tapered system with larger discounts for larger families.

Speaking to RND on Wednesday, Health Minister Karl Lauterbach (SPD) said his ministry would implement the changes to the law within the agreed timeframe. He said officials would look closely at the reasoning for the ruling and see how it could be best applied to a new tariff system.

However, Lauterbach emphasised that the social care system still needed to be properly financed. “We also want to tackle that,” he said. 

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HEALTH

‘Breaking point’: Why German pediatric wards are filling to capacity

Overcrowded patient rooms, days-long stays in the ER, transfer of sick babies to hospitals more than 100 kilometers away: the current wave of respiratory syncytial virus (RSV) infections in Germany is pushing children's hospitals to their limits. 

'Breaking point': Why German pediatric wards are filling to capacity

The German Interdisciplinary Association for Intensive Care and Emergency Medicine (Divi) said on Thursday that there was a “catastrophic situation” in children’s intensive care units. 

According to the physicians, a wave of respiratory syncytial virus (RSV) infections can be expected every year starting in the autumn. 

Yet this year “there are fewer and fewer pediatric hospital beds available overall” as well as a lack of nursing staff, Divi Secretary General Florian Hoffmann explained Wednesday on ZDF’s Morgenmagazin.

Because all beds were full in one case, a child was transferred from the Hannover Medical School (MHH) to Magdeburg on Friday night, a distance of around 150 kilometers. 

“My colleagues had called 21 clinics,” said Gesine Hansen, Medical Director of the MHH Clinic for Pediatric Pneumology, Allergology and Neonatology, told DPA. 

The child, who was about one-year old, had an RSV infection, which can be life-threatening, especially for babies and children with pre-existing conditions.

READ ALSO: 7 things to know about visiting a doctor in Germany

‘Catching up’

Some health experts have said that hospitals are now filled to capacity because children had minimal social contact during the pandemic and are now catching up on infections.

According to the Robert Koch Institute (RKI), an estimated 5.6 severe cases of RSV respiratory illness occur worldwide per 1,000 children in the twelve months after birth. 

Within the first year of life, 50 to 70 percent would typically have experienced at least one infection with RSV, and by the end of the second year of life, nearly all children should have experienced at least one infection. 

In the wake of protective measures against Covid-19, however, many such infections had temporarily failed to materialise. 

‘Breaking point’

According to Divi, hardly any clinics had a free crib or free pediatric intensive care bed in the past few days.

“Children have to lie in the emergency room for days,” Hoffmann said.

Yet the peak of the current wave of respiratory infections in children has by no means been reached, Hoffmann said. “The situation in practices and clinics will get even worse in the coming weeks.”

“We are at the breaking point,” said Matthias Keller, head of the Children’s Hospital Dritter Orden Passau already. The rooms are often double-occupied, he said. In some cases, there were too few monitors and not enough equipment for respiratory support.

READ ALSO: Flu season makes a comeback in Germany

A child with RSV being treated at the Olgahospital in Stuttgart. Photo: picture alliance/dpa | Marijan Murat

“Some patient rooms are like bed storage areas, where you really have to crawl over the beds to get to the sick child, because the parent bed is lined up with the patient bed,” said Keller, who is also chairman of the South German Society for Pediatric and Adolescent Medicine.

This has far-reaching consequences for other young children who need treatment. When an infant who has just been resuscitated is admitted to a children’s hospital that is actually fully occupied, a three-year-old has to wait there for the third day in a row for his urgently needed heart operation.

‘Responsibility of politicians’

A wave of infections usually lasts six to eight weeks. In Bavaria, Lower Saxony and Berlin, as well as North Rhine-Westphalia, clinics are reporting a “maximally tense situation,” reported Divi on Thursday.

The Düsseldorf University Hospital, for example, is experiencing a wave of influenza among its young patients in addition to the RSV wave, which is “causing massive problems primarily for children up to elementary school age,” said University Hospital spokesman Tobias Pott.

In the Rhineland, “all beds are completely full” at times, said Jörg Dötsch, president of the German Society for Pediatric and Adolescent Medicine. An ER waiting time of six to seven hours is not uncommon, he says. 

“It is very unpleasant when children and their families have to virtually camp out in the emergency room,” says Dötsch, who is also director of the Clinic for Pediatric and Adolescent Medicine at the University Hospital in Cologne. 

READ ALSO: Healthcare in Germany: How to get a faster appointment with a specialist doctor

What are the solutions?

At their meeting on Thursday in Hamburg, intensive care physicians and intensive care nurses will discuss approaches to solving the crisis. 

One solution may be to temporarily bring nursing staff from adult facilities into the children’s hospitals, says Hoffmann, who is also a senior physician at Dr. von Hauner’s Children’s Hospital at the University of Munich. 

But above all, he says, many more pediatric nursing staff need to be trained. “We need to strengthen nursing,” he explained. “Only then do we have a chance.”

Others said more money needed to be invested in pediatric medicine and vaccines, even if it is less profitable.

“The fact that children’s lives are currently in danger is the responsibility of politicians,” said Jakob Maske, spokesman for the Professional Association of Pediatricians and Adolescents.

“Nowadays medicine has to be profitable – not cure diseases, but make money.”

READ ALSO: How private investors are buying up healthcare practices in Germany

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