German Health Insurance Overhaul Passes: 73 Million Members Face Higher Costs and Fewer Benefits

Germany's Bundestag passes sweeping health insurance reform, raising costs for high earners, cutting benefits, and adding partner surcharges by 2028.

The Bundestag has pushed through one of the most consequential health insurance reforms in recent German history, voting 318 to 284 with four abstentions to enact the Contribution Rate Stabilisation Act. The legislation, which took effect on July 29, aims to save €18.8 billion by 2027 — but the burden falls squarely on the shoulders of the country's 73 million statutory health insurance members.

What changes for policyholders

Higher earners will feel the pinch first. The contribution assessment ceiling rises by €300 per month, meaning more of their income becomes subject to insurance payments. Co-payments for medications and treatments now range between €7.50 and €15, while the subsidy for dental prosthetics drops from 60 to 50 percent.

A particularly contentious provision kicks in from 2028: the previously contribution-free family insurance for married and registered partners will carry a 2.5 percent surcharge. Parents with children under twelve, caregivers and pensioners are exempt. The reform also removes the obligation for insurers to notify members when supplementary contribution rates rise — the special termination right survives, but policyholders must now track these changes themselves.

Sick pay and services take a hit

Homeopathy is being struck from the catalogue of covered treatments, and skin cancer screening faces review. For planned surgeries, a second medical opinion becomes the standard procedure.

The changes to sick pay are dramatic. From January 2027, anyone who loses their job will receive only 60 percent of their previous sick pay — or 67 percent for those with children. Rehabilitation applications must be filed within four weeks instead of ten. Partial sick notes arrive in 2028. The government frames these as necessary work incentives; unions describe them as a social regression.

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Psychotherapy access under threat

Therapists' associations are warning of a looming crisis. New quarterly budgeting and the elimination of surcharges for short-term therapy could strip practices of 20 to 30 percent of their revenue. Average waiting times for therapy slots already stand at 140 days — experts fear they could stretch to 15 months. The Hesse Chamber of Psychotherapists calls the cuts "measures aimed at the wrong end," pointing out that psychotherapy accounts for just one percent of total statutory insurance spending. Ongoing treatments will continue to be reimbursed.

Insurers tighten their belts

Health insurers themselves face new constraints. From 2027, administrative costs may only rise in line with the basic contribution rate. Marketing budgets will be halved to 0.075 percent of the reference amount — roughly €2.97 per insured person annually. Lawmakers expect savings of €100 million in 2027, growing to €480 million by 2030. IT security and online elections are exempt from the cuts.

Political fallout

Health Minister Warken (CDU) defended the package as unavoidable, warning that without it the system would collapse. To cushion the impact on the most vulnerable, the federal government is increasing its Bürgergeld supplement to €1 billion.

Opposition parties see it differently. The SPD and Greens accuse the government of employing a "lawnmower approach" that will degrade care quality; Die Linke calls it a step backwards for social policy. Regional governments have also voiced concerns, particularly regarding outpatient and psychotherapeutic services. Business associations, however, welcome the reform, arguing that stabilising non-wage labour costs was long overdue.