German parliament approves "two-tier" health "reform"

[Hannah Bell]

Last Friday, the German parliament passed “Health Reform 2011” into law. This paves the way for a two-tier health system and the privatization of the statutory health insurance scheme. The core of the reform is the introduction of unlimited capitation charges, or additional lump-sum fees per individual. The government has avoided using the term capitation because it is aware of its unpopularity.

This latest health care reform places an extra burden on working people with low and medium incomes in favour of the employers and private health insurance companies. Firstly, statutory health insurance premiums will rise next year from 14.9 to 15.5 percent of gross wages, with employees paying 8.2 percent. Employers’ health insurance contributions are being frozen at the level of 7.3 percent and future cost increases will be paid solely by employees.

The increase in the contribution rate means that employees earning a gross monthly salary of €1,000 will in future pay €82 instead of €79, an increase of €3 in the cost of statutory health insurance. Accordingly, those earning €2,000 or €3,000 gross per month will pay an extra €6 or €9 each month. However, no contributions are levied on incomes above the upper threshold, which was decreased slightly from €3,750 to €3,712.50, meaning the better off pay proportionally less.

Since it is assumed that the contributions will not cover the actual costs of health care, the health insurance schemes will have to levy so-called additional contributions. In reality, this represents the introduction of a capitation system, which is rejected by a majority of the population. At least since the general election in 2005, calling for a capitation system guaranteed an election defeat.

Since these additional contributions are paid to the health insurance scheme as lump sums regardless of actual income, low and middle-income earners will be charged much more proportionally than the better off. The law that was passed also permits a later expansion of the capitation principle, and there would be no upper limit for the actual size of such additional contributions.

Some health insurance operators have already announced that they will require additional contributions in 2011 or will be increasing contributions in 2010. One association representing health insurance companies covering 24 million people justified this with reference to the agreed changes to the health care reforms put forward by the government at the end of October.

http://www.wsws.org/articles/2010/nov2010/heal-n17.shtml