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Health care reform

September 22, 2010

Health Minister Philip Roesler says an aging society and technological advances mean health care will cost more in the future. On Wednesday cabinet agreed to his plan to transfer those increases to the German employee.

A girl gets a check-up from a doctor
Germans are set to pay more for the same care as costs riseImage: picture-alliance/ dpa

German Chancellor Angela Merkel's cabinet agreed on Wednesday to a controversial reform of the way the country's health care system is funded.

The reform, championed by Health Minister Philip Roesler, would freeze the income-dependant amount that the worker and his or her employer contributes after a slight increase next year while allowing insurance companies to meet their increased costs through new fees for the insured person.

"What benefits the patients is what's always right. We've solved some major problems for 2011 and for the coming years," Roesler said. "So this is the right thing.”

Health Minister Philip Roesler arrives for the cabinet meeting
Roesler insists there is no alternative to his reform plansImage: dapd

Ahead of the cabinet's discussion, he warned that only his plan could plug the 11-billion-euro ($14.6-billion) hole in the health care budget. "There isn't any other way to keep the system running," he said.

Under Roesler's system, each of the insurance companies would be able to set their own flat fee. Only those in the poorest income bracket will be able to pay a reduced amount, raising concerns that the fees will unfairly hurt lower-income and middle-class Germans.

Roesler: health care costs will rise

Currently the equivalent of 14.9 percent of a German worker's salary goes to the insurance companies, with 7 percent paid by the employer and 7.9 percent by the employee. Under the new plan, employers would pay 7.3 percent and employees 8.2 percent to bring the total to 15.5 percent beginning next year.

Roesler's reform would then freeze that amount, but that doesn't mean costs to most Germans won't go up, especially as Germany's population ages.

An older man
As Germany grays, the costs of keeping everyone healthy go upImage: BilderBox

"I can't promise that staying healthy will be any cheaper in the future," Roesler said. "That would be unrealistic. Health care costs are actually going to rise due to demographic developments and technological advances."

In addition to the increased fees, the reform calls for cost reductions by doctors, hospitals and the insurance companies.

Criticism from all sides

The cabinet's approval is a coup for Roesler, whose reform has been widely criticized, by the opposition, by doctors and even from within the ruling coalition.

The center-right Social Democrats (SPD) charge that the changes would hurt the German worker.

"This definitely would squeeze the employee," said Andrea Nahles, the SPD's general secretary. "The employer might have to put up with a little more bureaucracy here and there. But I am particularly concerned because this doesn't solve the real problems that our health care system has."

SPD General Secretary Andrea Nahles
Nahles says she's not convinced Roesler's plan takes Germany in the right directionImage: AP

Roesler's reforms have met also with resistance from doctors. "Some are dissatisfied," said Dr. Wolfgang Kreischer, a general practitioner in Berlin, "but there's nothing they can do. They just have to swallow the bitter pill that Mr. Roesler is giving them."

Although the governing coalition of Chancellor Angela Merkel's Christian Democrats (CDU), their Bavarian sister party the Christian Social Union (CSU), and the economically liberal Free Democrats (FDP) has agreed to the reform, some coalition politicians at the state level were more critical.

"If the gap between what the employer has to pay and what the insured has to pay gets too big, then the whole idea of solidarity is put at risk," said Markus Soeder, health minister for the state of Bavaria and CSU member. "The insured person cannot bear the rising prices of technological progress alone. We need appropriate and balanced financing."

The bill still needs to be approved by the Bundestag and the Bundesrat, the lower and upper houses of parliament, before being signed into law.

Author: Holly Fox
Editor: Andreas Illmer