Germany's coalition softens health insurance reform, shifting burden to pharma and federal budget

Coalition compromise ahead of final vote

Just days before the planned final vote in the Bundestag and Bundesrat, the governing coalition of CDU/CSU and SPD has agreed to amend the statutory health insurance (GKV) financing reform. According to multiple media reports, Health Minister Nina Warken (CDU) revised her draft law to ease the burden on insured persons while shifting more costs onto the federal budget and the pharmaceutical sector.

According to information from the F.A.Z., the coalition of Union and SPD agreed over the weekend to soften the draft savings laws presented by Health Minister Nina Warken (CDU) on these points.

Family insurance surcharge reduced

The most visible change affects the family insurance scheme. Starting in 2028, members will have to pay additional contributions for previously free co-insured spouses or life partners, but the rate has been cut from the originally planned 3.5% to 2.5% of contributory income. Parents with children up to and including the age of eleven remain exempt; the initial draft had set the threshold at six years.

Co-payment rules adjusted

Co-payments for medicines and hospital stays will still rise by 50% as planned, but a previously envisaged automatic annual increase linked to the base wage rate has been dropped. This means the one-time jump in out-of-pocket costs will not be followed by recurring hikes.

Federal government steps in

To offset the relief for insured persons, the federal government will increase its financial contribution. In 2027, an additional €1.4 billion will flow from the federal budget to the GKV compared to the cabinet draft. Finance Minister Lars Klingbeil (SPD) will provide an extra €750 million annually until 2030 for the healthcare of basic income support recipients. Although the federal subsidy will still decline from the current €14.5 billion to €14.15 billion in 2027, the original draft had foreseen a cut to just €12.75 billion.

Pharmaceutical industry bears the largest additional burden

The biggest new financing contribution comes from the pharmaceutical industry. The statutory manufacturer discount on medicines will more than double, from 7% to 15.5%. A price moratorium on vaccines is also expected to generate further savings. While the industry faces a sharp immediate cut, the coalition dropped an earlier plan for a dynamic discount that would have varied with drug spending and wage growth, potentially limiting long-term exposure.

Contribution rates stable until 2028

With these adjustments, the coalition aims to keep contribution rates stable despite unexpectedly high health fund expenditures. The general contribution rate remains at 14.6%, the average supplementary contribution at 2.9%, for a total of 17.5% shared between employers and employees. Warken accommodated demands from the SPD, CSU and the states, but successfully resisted a Social Democrat push to further raise the income threshold for contributions beyond the already planned increase.