"Time for a Change" - German Employers Reject Proposed Increase in Health Insurance Contribution Ceiling
Businesses Resist Boosting Ceiling of Sickness Coverage Contributions
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The tight financial situation of Germany's health insurance funds has led to the rejection of a proposal for raising the contribution assessment ceiling for health insurance by German employers. "Calling for more money doesn't solve the problem," said Steffen Kampeter, CEO of the Federal Association of German Employers' Associations (BDA), in an interview with Funke media group newspapers.
Germany hosts the most expensive healthcare system within the EU, with the least satisfactory results. To address this, Kampeter suggested that politicians need to present a reform plan, making the German healthcare system sustainable, cost-effective, and patient-friendly. In his opinion, raising the contribution assessment ceiling would simply serve as a significant tax increase on labor.
German SPD health expert, Christos Pantazis, had advocated for higher health contributions for high earners due to the challenging financial state of statutory health insurance funds. However, the Union faction rejected this proposition.
The contribution assessment ceiling refers to the income limit up to which social security and health insurance contributions are calculated. In 2025, this is set at €5,512.50 per month. In comparison, the contribution assessment ceiling for pension insurance is significantly higher at €8,050 euros.
According to Kampeter, the burden on employees is already enormous. Germany boasts one of the lowest ratios of disposable income to gross wage in the world, with taxes and contributions making up a significant portion of each earned euro. To rectify this, Kampeter urged consolidating the hospital landscape, ensuring adequate basic care, focusing services on efficient basic security, and strengthening the self-responsibility of insured persons.
The Big Picture
The rejection of raising the contribution assessment ceiling signals ongoing tensions regarding financing the statutory health insurance system in Germany. Through the lens of various alternative reform plans, they are considering the following strategies:
Hospital Care Improvement Act
- Addressing inpatient hospital sector inefficiencies, promoting centralization, specialization, and M&A activity.
- Restricting outpatient investment by tightening rules for Medizinische Versorgungszentren (MVZs).
Payroll and Social Security Updates
- An increase in employer social security contributions scheduled from 2025 to 2029.
- Discussions surrounding more equitable burden distribution via new co-financing models or innovative care delivery structures.
Efficiency and Digitalization
- Reducing costs through increased administrative efficiency, digitalization, and telemedicine.
- Rethinking healthcare delivery strategies and introducing new taxes or earmarked funds for the health insurance system.
In this endeavor, it is essential to maintain a focus on quality while curbing costs effectively. Employers and policymakers are in agreement that the status quo is unsustainable, and changes are necessary to secure the future of the German healthcare system, given its expense and subpar results.
Source: ntv.de, AFP
- In light of the rejection of raising the contribution assessment ceiling, policymakers might consider implementing vocational training programs within the healthcare sector to improve efficiency and reduce costs, ensuring the sustainability of the German healthcare system.
- To address the financial burden on employees, a possible solution could be integrating health-and-wellness programs as part of community policy, which focuses on preventive care and medical-conditions management, thereby reducing healthcare costs in the long run.
- As a means of ensuring financial stability for statutory health insurance funds, policymakers may also consider presenting a reform plan that incorporates science and innovation in the finance and business sector, aiming to generate additional revenue for the healthcare system without burdening labor with significant tax increases.
