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HEALTH

German health insurance costs set to rise next year

Health Minister Karl Lauterbach wants to raise additional contributions for statutory health insurance organisations in 2023.

Published: 28 June 2022 17:08 CEST
A stethoscope lies on banknotes.
A stethoscope lies on banknotes. Photo: picture alliance/dpa/Clark Germany GmbH | Clark Germany GmbH

The move means that the millions of people who have statutory health insurance (GKV) in Germany will likely face a significant rise in additional contributions next year. 

Health Minister Lauterbach (SPD) said on Tuesday the additional contributions would rise by 0.3 percentage points to 1.6 per cent.

If the increase goes ahead as planned, it could mean top earners with statutory health insurance would have to pay up to €87 extra per year, and average earners (bringing in around €4,000 gross per month) around €72 more, according to a calculation by German daily Bild. 

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

READ ALSO: How can I change my health insurance provider in Germany?

The health insurance funds can levy additional contributions. The average additional contribution rate is is calculated annually by the Health Ministry and based on the projected expenses of health insurers. 

The average is 1.3 percent for 2022, but varies from fund to fund. If the additional contribution now rises to an average of 1.6 per cent, the health insurance overall contribution rate will exceed 16 percent of people’s wages for the first time.

Why are the additional contributions rising?

Lauterbach said statutory health insurance organisations are facing a deficit of about €17 billion next year. 

The Health Minister said in a tweet: “Unfortunately, the contribution rate has to increase by 0.3. The deficit is too large: €17 billion.”

He added that pharmaceutical industry was “making the biggest solidarity contribution” because their “turnover increased very strongly”.

The government hopes that the increase of the additional contribution will generate additional revenue for the health insurance funds of almost €5 billion.

Health insurance organisations will also receive a further federal subsidy – i.e. tax money – of €2 billion, to a total of €16.5 billion, plus a loan of €1 billion.

Meanwhile, there are also plans for a one-off solidarity levy of €1 billion from pharmaceutical companies, and another €3 billion is planned to be saved through efficiency improvements.

“I have essentially inherited this deficit from my predecessor,” Lauterbach said, referring to former Health Minister Jens Spahn (CDU). 

Lauterbach’s proposal will now be voted on by the ministries. Finance Minister Christian Lindner (FDP) has already agreed to the plans.

Several health insurance organisations recently increased their contribution rates, particularly since the Covid-19 pandemic began.

Vocabulary

Additional contributions (die) Zusatzbeiträge

Steigen – to increase

Additional revenue – (die) Mehreinnahmen

Statutory public health insurance – (die) Gesetzliche Krankenversicherung

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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HEALTH

How much more residents in Germany might have to pay for health insurance

People in Germany saw an increase in health insurance costs at the start of the year. It's now expected that they will be hiked up again next year.

Published: 20 June 2024 13:49 CEST
How much more residents in Germany might have to pay for health insurance

Health insurance organisations are warning that costs will be hiked up again soon due to concerns over funding. 

Doris Pfeiffer, CEO of the National Association of Statutory Health Insurance Funds (GKV-Spitzenverband), told Germany’s Tagesschau that insurance funds are expecting a billion-euro deficit.

She said it was a tough year “because we don’t have particularly good prospects”.

For people paying statutory health insurance, things could become more expensive next year. Around 90 percent of people in Germany are covered by statutory health insurance.

The contribution rate is fixed by law and stands at 14.6 percent. The additional contribution that the health insurance funds set for their members was raised to 1.7 at the start of this year. 

The latest increase gave statutory insurance funds the ability to charge up to 1.7 percent on top of the standard 14.6 precent contrinution, though not all insurance funds chose to do so.

The costs are split between the employer and employee, so workers in Germany would pay half of any increase. 

READ ALSO: Reader question: How can I change my German health insurance provider?

How much could additional costs rise next year?

Due to the funding issues, health insurers expect an increase of up to 0.6 percentage points to the additional contribution threshold. What this would mean for the insured depends on a few variables such as their income and their insurer.

Someone earning €2,000 gross per month, for example, would have to pay €6 extra per month if their insurer opted to increase additional contributions by this amount. Meanwhile, a gross income of €4,000 would mean €12 extra per month. The employer’s share would be added to this. 

health insurance cards

Many health insurance cards in Germany double as a European Health Insurance Card (EHIC), meaning that they can be used across Europe. Photo: picture alliance/dpa | Jens Kalaene

“That may not sound like much at first glance,” said Pfeiffer. “But there are people who earn very little for whom this is a lot – supermarket cashiers, lorry drivers.”

It comes following a rise in fees at the start of the year. From the start of 2024, additional contributions for statutory health insurance rose by around 0.1 percent in Germany.

Why are costs increasing?

The German healthcare system is one of the most expensive in the world.

As German society ages more, costs continue to rise – and the Covid pandemic didn’t help matters. The National Association of Statutory Health Insurance Funds estimates that this year alone it will cost around €314 billion to provide care for everyone who is insured. 

The money is mainly spent on hospitalisation costs and medical treatment.

READ ALSO: Why long-term care insurance fees are likely to rise in Germany next year

Health Minister Karl Lauterbach (SPD) has so far not presented any concrete proposals on how he intends to relieve the burden on health insurance funds in future.

Instead, the system is likely to face further expenditure. Lauterbach’s hospital reform is expected to drive up costs, while proposals to pay GPs more in order to combat the shortage of doctors would also push up expenses. 

READ ALSO: German ministers greenlight plan to improve healthcare at GPs

Pfeiffer called for a plan to tackle the rising costs.

“We now finally need an approach that puts this healthcare system on a new footing,” she said.

In the coalition government’s initial agreement back in 2021, the parties vowed to support health insurance funds with more tax revenue.

But as difficult budget negotiations take place, it doesn’t look like this will happen. 

This is causing friction among the coalition made up of the Social Democrats (SPD), Greens and Free Democrats (FDP). 

Green budget politician Paula Piechotta, for instance, is unhappy about this.

The opposition CDU/CSU also taken the opportunity to swipe at the government.

“This is not acceptable,” said CDU health politician Sepp Müller. “The tense situation in the social security system cannot continue to be ignored.”

However, it should be noted that there was no plan to help provide more money to statutory health insurance under the previous Health Ministry headed by the CDU’s Jens Spahn. 

When the SPD’s Lauterbach took over in 2021, there was already a funding gap of billions of euros. 

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