How Germany's public health insurance shake-up will affect families

The German government is planning a massive shake-up of statutory health insurance in a bid to plug the ever-growing funding gap and limit excessive contribution hikes.

As The Local has been reporting, one of the major cuts involves restricting free health insurance for spouses.

If the plans get the green light, families where one spouse with low or no income is insured free of charge through the working partner's statutory health insurance, will face significant additional costs from 2028.

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Here's what the proposals from Health Minister Nina Warken (CDU) means for families in Germany, including the additional payments they will face in future. 

Where do things stand on spousal insurance?

Currently, contribution-free (Beitragsfrei) family insurance under statutory health insurance (GKV) is possible if the spouse of a working partner does not work, earns less than €565 per month or up to €603 from a mini-job.

According to the government's working plan, however, this group would need to pay a contribution going forward, although exceptions will remain. 

The Health Finance Commission estimates that around 1.6 million co-insured spouses will be affected.

Children, however, are to remain covered by family insurance free of charge. In principle, this is possible at least until their 18th birthday – and in many cases for longer for apprentices or students, for example.

What are the planned exceptions?

The contribution-free co-insurance of a spouse is to remain in place even after the reform – provided one of the following conditions is met:

• If the family has a child (or children) under the age of seven.
• If the family has a child (or children) with a disability who requires care.
• If the co-insured person provides care at home for a person with at least care level two for a minimum of 10 hours per week.
• If the co-insured person has already reached the statutory retirement age.

The coalition government, made up of the conservative Christian Union parties (CDU/CSU), along with the Social Democrats (SPD), hopes these exceptions mean there is not an additional burden for people providing care, such as bringing up young children. 

According to estimates, overhauling statutory health insurance would generate additional revenue amounting to billions of euros per year. 

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What extra costs will those affected face?

Initially, there was talk of co-insured spouses having to pay a flat-rate amount of €225 per month, which would amount to €2,700 per year.

However, Health Minister Warken is now putting forward a proposal that would mean co-insured spouses pay a 3.5 percent surcharge on the gross income of the main earner.

So the additional payment would vary depending on their partner's income. Here's a look at what spouses would have to pay:

• If one partner earns €3,000 gross per month, the monthly premium for the partner’s health insurance would be €105, or €1,260 per year.
• With a gross monthly income of €4,000, the annual premium would be €1,680.
• With a gross monthly income of €6,000, the annual premium would be €2,520.

It means the annual cost for spouses in most cases would therefore be in the range of €1,200 to €2,500.

A possible alternative is that the spouse takes on a job subject to social insurance contributions with an income above the family insurance threshold, currently set at €565 a month. In this case, the spouse becomes liable for insurance contributions themselves.

The amount of the contribution then depends on the level of income and the employer covers half of this.

What about long-term care insurance?

It's now clear that the planned restrictions on family insurance will also be extended to long-term care insurance.

According to the plans, co-insured spouses who are neither raising young children or caring for relatives – and do not meet other grounds for exemption – will in future have to pay an additional 0.7 percent of their contributory payment into the long-term care insurance scheme.

Where does the debate stand, and what happens next?

The draft bill first has to approved by the Federal Cabinet, then by the Bundestag and Bundesrat. There is as yet no concrete timetable for when it would come into force.

The coalition says that without cost-cutting measures, statutory health insurance Germany faces a budget shortfall of over €15 billion by 2027.

Other ways the government wants to claw back savings is through increasing co-pays for medication, cutting services like free skin cancer screenings, and introducing mandatory second opinions to approve pricey procedures like hip or knee surgeries.

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However, there is pushback on the plan, including from leaders within the federal coalition like CSU leader Markus Söder.

The German Trade Union Confederation, welfare organisations and opposition parties are also warning of an attack on families – particularly on women without their own income.

Oliver Blatt, Chairman of the GKV-Spitzenverband – the central association of health insurance funds – recently said that contribution-free co-insurance of spouses is "above all a social issue".