Even before the coronavirus crisis, the balance sheets of Germany’s public health insurance funds were looking rocky. In order to support them through the next year, the federal government is planning a multi-billion-euro cash injection. 

Statutory health insurance to receive major subsidy in 2022

Statutory health insurance in Germany is to receive an extra 7 billion euros of taxpayer money in 2022, in order to keep contributions stable. According to an ordinance issued by Federal Health Minister Jens Spahn, in agreement with the Finance Ministry, government funding for health insurance is to rise to a total of 28,5 billion euros in 2022. 

Germany’s outgoing government had previously stipulated that the public health insurance funds would receive 7 billion euros on top of the regular subsidy of 14,5 billion euros in 2022. The aim is to prevent the average additional contribution (Zusatzbeitrag) from exceeding the current level of 1,3 percent. 

In its proposal, Germany’s Health Ministry said that, by stabilising the contribution rate, the federal government would “make a significant contribution to limiting social security contributions to below 40 percent [of a person’s total income] and thus to a faster recovery of the economy after the COVID-19 pandemic.” 

German health insurers call for further financial relief

The news of the additional funding was welcomed by health insurers. “Now it is important the Bundestag approves [the change] by mid-November so that the funds have a binding basis for their budget planning for 2022,” said the head of the National Association of Statutory Health Insurance Funds, Doris Pfeiffer. 

Pfeiffer further called for the government to take extra steps to relieve health insurers of financial strain, for instance by lowering VAT on pharmaceutical products and medicines. “It is incomprehensible that oysters, cut flowers and oil paintings incur the reduced VAT rate of 7 percent, while for cancer drugs and hypertensive drugs, [the rate is] 19 percent. The health insurance companies pay taxes that are more than twice as high,” she said. 

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