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11 July 2006

EZA 750 Briefing Note:




Germany – Politics/Reform


Clients: please note that there was a minor editing error relating to childrens healthcare: The corrected paragraph reads: 5) Child Health The insurance of children will be funded through general taxation – instead of health taxes (as the current regime). This brings cost relief for health insurers in the future, but a higher bill for the general government. In 2008 the government has set aside € 1.5 bn, and € 3 bn in 2009 to cover this cost. However, there is a debate between the SPD (which wants to avoid the explicit link between child health care and taxes – in order to exclude those privately insured) – and the CDU. According to health care experts insuring child health will cost € 16 bn (in 2006 euros) by the final stage. The government is committed to achieve this shift without tax hikes, which would demand a reshuffling within the budget of the health care ministry.

Comment: taking children out of the health insurance budget has been a long-standing demand from economists in order to allow for a reduction of health taxes – hence non-wage labour costs. In theory this would impart cost relief for insurers in the future; in practice this cost relief will be taken up by higher expenses for the growing share of older members. On the other hand children’s insurance may be less costly than estimated, which may provide the CDU state premiers with a justification for resisting tax hikes.



© Graham Bishop

Documents associated with this article

EZA750.pdf


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