Bundestag passes controversial austerity package: Higher co-payments and benefit cuts for 75 million insured persons

Chancellor Friedrich Merz (CDU) described the reform on the platform X as a «Meilenstein für mehr Verlässlichkeit im System». Healthcare must remain affordable. According to the minister, «alle Beteiligten im Gesundheitswesen einen Beitrag», because insured persons and employers do not want rising contributions. Without the reform, the ministry's calculations show, the contribution rate would rise by a full percentage point in 2027.

Cuts for insured persons: Co-payments and dental prostheses

For insured persons, the law brings noticeable cuts. Co-payments between 5 and 10 euros that have remained unchanged for 22 years — for example, when picking up prescribed medications at the pharmacy — will rise to 7.50 to 15 euros. The fixed subsidy for dental prostheses will drop from 60 to 50 percent of costs, although hardship provisions continue to apply. Among other things, homeopathic services covered by the funds will be eliminated. The contribution assessment ceiling, which already rises annually, is to be raised once more in 2027 by an additional 300 euros to 6,112.50 euros, in order to draw more heavily on high earners.

For partners of fund members who have so far been co-insured free of charge, a contribution surcharge of 2.5 percent is planned from 2028. In addition, the regular federal subsidy to the health insurance funds of 14.5 billion euros per year is to fall by 1.35 billion euros next year; the original draft had envisaged a cut of two billion euros. At the same time, the funds will receive an additional one billion euros from the federal budget for 2027 to cover the health costs of basic security recipients, instead of the previously planned 250 million euros.

Criticism from the healthcare sector

Bavaria's Minister-President Markus Söder (CSU) defended the package as «mit Schmerzen, aber doch zustimmungsfähig». The German Hospital Federation (Deutsche Krankenhausgesellschaft) described the 550 million euros now promised for hospitals and university hospitals as «ein paar Tropfen auf den heißen Stein». The Association of General Practitioners spoke of «wahllosen Kürzungen» and warned of longer waiting times for patients.

Point of contention: Psychotherapy

Especially sharp criticism came from the field of psychotherapy. The Association of Statutory Health Insurance Physicians (Kassenärztliche Vereinigung) and the German Psychotherapists' Association (DptV) opposed the planned abolition of the so-called appropriateness review (Angemessenheitsprüfung) for psychotherapeutic services. KV board member Peter Andreas Staub criticized that the legislature was striking provisions with which it had implemented the jurisprudence of the Federal Social Court, which constitutionally protects the special features of psychotherapeutic services.

Lisa Marie Hubbe, state chair of the DptV in Saxony-Anhalt, reported «Ohnmacht, Besorgnis und großer Unsicherheit» among colleagues. The social policy spokesperson of the CDU parliamentary group in Saxony-Anhalt, Tobias Krull, warned that prospective psychotherapists could decide against a professional future in private practice or focus only on private patients. That could further aggravate the supply situation. Patients currently wait an average of six to twelve months for the start of treatment.

Psychotherapist Kristin Ackermann, who has run a practice in Gardelegen in Saxony-Anhalt since 2015, described the personal consequences: «Meine Praxis wird damit weiter unter Druck geraten, und Druck ist keine gute Voraussetzung, um zu arbeiten.» Ackermann had only recently completed her training and says: «Ich dachte eigentlich, nach der Ausbildung gibt es endlich Sicherheit, und darauf habe ich mich auch gefreut.» She is now considering not opening her own practice.

Pharmaceutical industry announces investment cuts

From the pharmaceutical industry came signals of declining willingness to invest. The US group Eli Lilly confirmed that it would reduce its planned investment at its Alzey site in Rhineland-Palatinate. Instead of the originally planned 2.3 billion euros, only about half will flow into the plant. The pharmaceutical company Boehringer Ingelheim is also foregoing planned investments of 900 million euros, according to its own statements. The reform drew a storm of protest: «Diese Reform wird zum Todesstoß für viele weitere werden!», according to industry circles.

Hospitals, too, face enormous burdens according to the Verdi trade union. Verdi regional leader Marion Paul explained that, in addition to the «Fürchterlichkeiten in der GKV-Reform», the increased financial pressure hits hospitals in Rhineland-Palatinate and the Saarland particularly hard. In recent years, numerous hospitals in rural areas have already had to close. The Left faction leader Heidi Reichinnek said in the Bundestag: «Sie gefährden mit diesem Gesetz Menschenleben.» Nicole Hess of the AfD called the draft «keine Reform, sondern eine Einladung zum Rückzug aus der Versorgung».

Rhineland-Palatinate's Minister-President Anke Rehlinger (SPD) signaled approval, while Saarland's Minister-President Gordon Schnieder (CDU) stated: «Reformen sind selten bequem, gerade im Gesundheitswesen wissen wir seit Jahren, dass die bestehenden Strukturen unter enormem Druck stehen und nicht länger tragfähig sind.» SPD faction vice-chair Dagmar Schmidt dampened expectations: «Das ist alles andere als eine Nullrunde.» Her party colleague, Rhineland-Palatinate's Health Minister Clemens Hoch, saw the law making the success of the hospital reform more difficult.

Opposition assessment

Greens health expert Janosch Dahmen expects higher GKV contributions in 2027 as well. «In allen Folgejahren wird das Defizit der GKV noch höher ausfallen», he said. «In Kombination dieser Effekte hält das Gesetz nicht, was es verspricht.» Criticism of the cross-subsidization of health costs for basic security recipients from contribution funds also did not fall silent. SPD politician Hoch lamented: «Das nun verabschiedete Gesetz droht, die medizinische Versorgung im Land erheblich zu erschweren.»

Outlook: Further reforms announced

In parallel, the Bundestag and Bundesrat passed the new Building Modernization Act (GModG), often referred to as the «new heating law». The black-red coalition thereby rolled back provisions of the former Ampel government that had mandated a minimum share of 65 percent renewable energies for the installation of new heating systems. At its core, the matter concerns the «Anforderungen an eine Heizungsanlage», according to coalition circles. A originally planned dynamic price discount for pharmaceutical manufacturers, which would have been increased annually, was scrapped in the parliamentary process.

With the two reforms, the CDU/CSU and SPD coalition, in power since May 2025, begins the series of major projects it has set itself. As with the «Heating Law», the government tried to establish early clarity about the financial planning for the following year. For the austerity package for the health insurance funds, Warken agreed with the states on additional funds: 450 million euros are to flow to hospitals, 100 million to university hospitals. The cross-subsidization of basic security from contribution funds was not stopped despite minor corrections, as had been envisaged in the 66 expert recommendations.

On balance, the law is intended to prevent contribution increases while accepting higher out-of-pocket costs and benefit cuts. The CDU members of the Bundestag from Saxony-Anhalt voted unanimously in favor of the austerity package despite the warnings from the state. Nationwide, observers expect a further wave of protests from the healthcare sector if the supply situation, particularly in psychotherapy, worsens as critics fear.