Both coronavirus and reforms to Germany’s healthcare system are putting pressure on statutory health insurance. Last year, the public health insurance funds (Krankenkassen) recorded their largest deficit in almost two decades. 

German health insurance funds record deficit of 2,5 billion euros

According to preliminary figures, available to the Frankfurter Allgemeine Zeitung, the statutory health insurance companies’ deficit swelled by around one billion euros in 2020, to a total of 2,5 billion euros - an increase of almost two thirds. 

The newspaper reports that the financial situation of the Krankenkassen is therefore currently worse than it has been for more than a decade and a half. The last time a higher deficit was recorded was in 2003, when the minus figure stood at 3,4 billion euros. Since then, statutory health insurance companies have generated surpluses in 12 out of 16 years.

Coronavirus crisis puts pressure on finances

While the coronavirus crisis undoubtedly drained the health funds’ cash reserves, it’s not the only factor that explains 2020’s enormous deficit. In the early stages of the year, the health insurance funds actually had very healthy balance sheets - paradoxically, precisely because of the pandemic. 

In order to make room for a potential influx of coronavirus patients, hospitals postponed expensive operations, while rehabilitation clinics and doctor’s surgeries remained empty. In the first half of the year, therefore, the health insurance funds achieved a surplus of almost 1,3 billion euros. 

It was only in the third and fourth quarters of the year that things started to go rapidly downhill, as the pandemic situation worsened, just as clinics were forced to catch up with the inpatient and outpatient care that had been postponed in the early part of the year. In quarter three, the balance sheet slumped to a deficit of 3 billion euros, followed by another deficit of almost 900 million in the fourth quarter. 

At the same time, regardless of the pandemic, the health insurance companies have also been grappling with a number of expensive reforms - designed to update and modernise Germany’s healthcare system - initiated by Health Minister Jens Spahn. The costs triggered by these 13 laws and amendments are estimated by health insurers to amount to around 33 billion euros between 2019 and 2022.

Additional contributions might increase this year

Health insurance funds are warning that their expenditure will continue to increase dynamically in 2021, while at the same time their income via social security contributions looks set to fall even further. The chairperson of the health insurance association VDEK, Ulrike Elsner, told FAZ that if there were no consolation measures, they would be forced to double their additional contribution (Zusatzbeitrag) rates for the coming year to 2,5 percent. 

Her comments echo those of the AOK, an association of statutory health insurance funds that collectively cover around a third of the German population. Last year, they warned that if the government did not step in with additional funds, their financial shortfall would force them to double their additional contribution charge in the coming year.