After a long fight, the coalition achieved billions of dollars in savings in health care costs that are designed to prevent premium increases.
The Bundestag has approved the black-red coalition’s controversial austerity package for stable health insurance premiums. 319 deputies voted for the law, there were 286 votes against, with four abstentions. The controversial legislation also passed through the Federal Council on Friday afternoon, with a request for an appeal to the Mediation Committee failing to find a majority in the State House.
Health Minister Nina Warken said of the Bundestag’s decision: “After many years of rising health insurance premiums, we have finally created the basis for stable financing of compulsory health insurance.”
The package includes billions of dollars to cut costs in clinics, pharmacies and the pharmaceutical industry. Patients face restrictions on free co-insurance for spouses and increased copays for medications, among other things. This is intended to free compulsory health insurance companies from billions of euros next year and prevent further increases in additional contributions.
“We make do with the money we have”
Warken has previously defended the austerity package. “Everyone who participates in the health care system contributes because everyone benefits from sustainable funding in the long term,” the CDU politician said during a debate ahead of the planned vote in the Bundestag. The situation of compulsory health insurance companies is dramatic and no longer allows for any delays. So the guiding principle of the law is: “In the future we want to make do with the money we have and pay only for what is useful.”
As for the changes yet to be made, Warken emphasized, “This package remains balanced.” Now that the project is available, a new gap is also closed, she said, given the further increase in the deficit expected in 2027 by 3.5 billion euros. The minister did not specify specifically what amount of savings is now provided for by law.
Harsh criticism from the opposition
The criticism came from the opposition. Green Party leader Britta Hasselmann said the hot bill protects real cost factors. “There will be no stability in contributions, but there will be bankruptcies of hospitals, overworked family doctors and betrayal of psychotherapists.” The leader of the left-wing parliamentary group, Heidi Reihinnek, said: “You are putting human lives at risk with this law.” Nicole Hess (AfD) said: “This is not a reform, this is an invitation to leave care.”
More recently, the coalition has repeatedly changed its austerity plans after constant criticism. It is also debatable whether the goal of avoiding increases in health insurance premiums will be achieved again. In the days leading up to the vote, the government submitted 278 pages of amendments. Green and Left MPs wanted to prevent the vote by filing an urgent application to the Federal Constitutional Court. However, the court rejected the request.
Billion savings goal increased even further
Warken has increased its savings target for 2027 to €18.8 billion due to the recent rapid increase in spending. According to her, the new gap will be closed by the current project. It was initially unclear to what extent a slightly larger buffer for the unexplained would be created. The law is due to be presented to the Federal Council today. This does not require consent. It is unclear whether the State House can convene a conciliation committee. This will slow down implementation.
Recently, several changes have been made to the project. The burden on insured persons was partially eased. Additional payments for medicines will be increased from a minimum of 5 and a maximum of 10 euros to 7.50–15 euros. However, it was ruled out that additional payments would also have to be adjusted annually. Complimentary joint coverage for spouses will be limited, but now with broader exclusions. It should be reserved for parents of children under twelve years of age instead of seven.
More tax money than originally planned
For partners who will no longer be freely insured in the future, fund members will have to pay a premium surcharge of 2.5 percent from 2028. It was also decided to provide more tax money than originally planned. In 2027, the regular federal subsidy of €14.5 billion is expected to fall by €1.35 billion instead of €2 billion. Federal government payments for health care for those receiving basic insurance will increase by one billion euros in 2027. Changes have also been made to planned price cuts for pharmaceutical manufacturers.
Overall, the law aims to limit fee increases for all service providers, such as doctors and clinics. Homeopathic services for health insurance costs should also be abolished. For weeks there have been violent protests against cuts and warnings of deteriorating quality of care throughout the health system. Chancellor Friedrich Merz (CDU) has made it clear that the package is intended to be the start of a series of major reforms for the black-red coalition this year.