German Health Funds Expecting Massive Deficit

Reports of billion euro deficits once again this year are raising doubts about a government plan to sink health insurance rates across Germany in 2004. According to the Frankfurter Allgemeine Zeitung newspaper, Germany’s largest public health funds administrator, AOK, is set to announce a deficit running as high as €900 million ($981.8 million) for the first half of 2003. Earlier this year, the government approved a reform plan with the goal of reducing monthly premiums from 14.4 to 13 percent of a person's gross monthly income. However, that plan has been largely contingent on the ability of public health fund providers to cut costs. During the first quarter this year, the public health funds ran a deficit of €630 million. Official figures will be released by the Health Ministry at the beginning of September.