Germany’s Health Minister Unveils Cost-Cutting Plan to Stabilize Insurance Rates
German Health Minister Nina Warken (CDU) has unveiled a cost-saving package to prevent higher expenses for statutory health insurance in 2025. The minister, who took office in October, has criticised predecessors for not implementing fundamental changes to curb insurers' deficits. She noted that revenues and expenditures have diverged further in the past three years.
Warken's package includes further structural reforms to reduce healthcare system costs. She has acknowledged that not all insurers will be able to keep their rates stable due to competition. Several insurance representatives have already announced expected premium increases in 2025 despite the cost-saving package. Warken has advised citizens to switch to cheaper health insurance providers to avoid premium hikes.
In October 2022, Minister Warken announced structural reforms to reduce healthcare costs by planning savings of two billion euros in the statutory health insurance system for 2026. About 1.8 billion euros in cuts were primarily targeted at hospitals, halving the innovation fund savings by 100 million euros, and limiting the rise in administrative costs by another 100 million euros. These proposals were set to enter the federal cabinet in mid-October 2022 as part of legislation aimed at expanding powers and reducing bureaucracy in care.
The federal government's priority is to prevent a continuous upward spiral in healthcare costs. Minister Warken's cost-saving package and structural reforms aim to achieve this by targeting hospital cuts, limiting administrative costs, and encouraging citizens to switch to cheaper car insurance providers. However, some insurers may still increase contributions due to competition.
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