A Look Inside Germany's Healthcare Reforms

On Friday Germany’s government saw the first major reform package in its ambitious Agenda 2010 platform pass through parliament. The plan to overhaul the costly public healthcare system still has to pass through the country's upper legislative chamber, which represents the states’ interests, but since representatives from the opposition conservative Christian Democrat Union worked with the government to hammer out the framework for the reform, it’s likely to get final approval there too.

The nearly 470-page document detailing measures to cut back on public healthcare spending was harshly criticized from within the government’s own coalition of Social Democrats and Greens. Many said the reforms unfairly placed the financial burden on individual patients while doctors and the pharmaceutical industry walked away only having to shoulder about €3 billion of the estimated €20 billion in overall cuts. The bulk of the savings will come by scaling back on special benefits and coverage for expensive dental work.

Key points of reform:

Dentures

: After 2005 replacement teeth will no longer be covered under the statutory health insurance plan. Patients must pay for dentures out of their own pocket or insure them with an extra income-based dental policy. Families are automatically insured through the main policy holder. Individuals in the public insurance plan can also opt to sign a dental policy with private insurers. Families are not covered in the private plans.

Sick pay

: Starting in 2006 employers will be required to pay all wages for workers after the seventh week of sick leave without receiving subsidies from the insurance companies. The individual worker will be required to pay a supplementary premium of 0.5 percent. Sick pay up to the sixth week of illness is completely covered by health insurance.

Additional fees

: In general patients will be required to make a copayment of €5 or, at the most, €10 on all care they receive. The additional fees are not to surpass €10 euros per quarter for individual medical and dental treatment and is not required for treatment based on referrals. Hospital care will also cost €10 a day for a maximum of 28 days per year. Out-patient care and house visits carry an additional price tag of €10 plus 10 percent of the overall medical bill. None of the supplementary fees may exceed the ceiling of 2 percent of income or 1 percent for chronically ill patients.

Reductions

: Health insurerance will no longer pay for taxi rides to out-patient treatment. Sterilization for non-medical related reasons has been cut entirely from the budget and coverage for fertilization will be limited. Subsidies for glasses and other sight aids will only be covered for patients under 18 years and for the severely handicapped. The previously paid birth and death supplements (although not the medical costs related to having a child) will be cut in the future. And patients will have to pay for a broad series of prescription-free medicine instead of relying on subsidies from their insurer.

Patients

: Patients who can prove they have taken advantage of preventive care may receive a financial bonus from insurers. Out-patient treatment within the EU will be covered, but for a hospital stay approval from the insurer is required.

Doctors

: They will be required to show proof of continuing education otherwise they will suffer disadvantages in reimbursement from the insurers. Insurers must cover doctors’ house visits and hospitals may offer out-patient treatment in a patient’s home.

Pharmaceutical industry

: Pharmacies are required to offer medication at the cheapest price available, even for re-imports. Mail order pharmacies are permitted under the new law. Pharmacists may now own up to three branches and there is no longer a fixed price on medication.

Contributions

: The current fee requiring a contribution of 14.3 percent of income for employees will be reduced next year to 13.6 and in 2006 to 12.15 percent. The current practice of splitting the costs equally between employer and employee will continue.

Insurers

: The reforms are expected to save the insurers up to €9 billion. From that amount they will be able to chop off €3 billion in debts and pay for the reduced contributions. Within four years they will be expected to have completely eliminated their deficits.