Published by Global Banking & Finance Review®
Posted on March 30, 2026
2 min readLast updated: March 30, 2026
Add as preferred source on GoogleGermany’s special commission proposes a sweeping cost‑containment package for statutory health insurance—capping treatment pay, pharmaceutical and hospital costs, introducing selective tax hikes, and increasing federal funding to prevent a projected €15.3 billion shortfall in 2027 that could swell t
BERLIN, March 30 (Reuters) - A special commission presented proposals on Monday to cap rapidly growing costs in Germany's statutory health insurance system as Chancellor Friedrich Merz's government began a drive to agree a package of tax and welfare reforms in coming months.
Rising health costs have already created a shortfall in the statutory health insurance system which the commission said would reach 15.3 billion euros ($17.53 billion) next year unless action is taken.
It said that without measures to contain costs, the shortfall would more than double by the end of the decade to reach around 40 billion euros in 2030.
Containing the rise in statutory health insurance costs, which are shared by workers and employers, is seen as a central pillar of Merz's drive to lift Germany's sluggish economy by cutting costs and bureaucratic obstacles for companies.
Health Minister Nina Warken said the commission's proposals would form the basis for legislation which should be approved by cabinet in July.
The report presented on Monday includes a range of proposals aiming to restrain spending by tightening controls on remuneration for treatment, limiting pharmaceutical and hospital costs and ensuring that any spending increases were matched by corresponding revenue increases.
It also recommended higher taxes on tobacco, alcohol and sugary drinks as well as funding healthcare costs for recipients of basic income support from the federal budget.
($1 = 0.8726 euros)
(Reporting by Holger Hansen, writing by James Mackenzie, Editing by William Maclean)
Rapidly rising health costs have led to a shortfall, expected to reach 15.3 billion euros next year if reforms are not made.
The commission proposed tighter controls on treatment remuneration, limits on pharmaceutical and hospital costs, tax increases on tobacco, alcohol, and sugary drinks, and federal funding for healthcare costs of basic income recipients.
The government expects to have the proposed legislation approved by cabinet in July.
Without action, the commission warns the shortfall could more than double by 2030, reaching about 40 billion euros.
Statutory health insurance costs in Germany are shared by both workers and employers.
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