In order to prevent an 11 billion euro hole in the public health sector and to reshape the country’s insurance system, which finds itself short on cash, Germany passed a healthcare law on Friday that raised criticism.
The law increases health insurance taxes for employers and for the insured population.
While the population keeps growing discontent about rising taxes and this has crashed Angela Merkel’s coalition in the polls, the center-right Chancellor sees the bill as one of its most significant ones this year. The bill’s details were cause for clashes between Merkel’s Christian Democrats and their coalition partners, the Free Democrats.
According to the new bill, mandatory heath insurance tax will be increase from 14.9 percent to 15.5 percent of gross salary, and it is evenly shared by employers and employees. However, employers will be the only ones paying for future increases of the tax.
Opposition parties, as well as trade unions and insurance companies, have criticized the bill as being aimed rather at raising taxes instead of reducing costs. They also said that this reform bill might just as well be thought of as destroyer of one of the best public healthcare systems in the world. The country’s national insurance scheme covers about 72 million people and private insurance schemes account for coverage of another 8.5 million.
A day before, Germany also passed a set of related measures aimed at cutting down costs for the insurance industry. These measures are to limit what pharmaceutical companies’ can charge in Germany for prescription medication and the goal is to save health insurance some 2 billion euros.
