Germany’s Cabinet approved a health care draft law intended to slow rising statutory health insurance premiums. The bill now moves to the Bundestag, where it faces close scrutiny from lawmakers, medical associations, and patient protection groups, according to Deutsche Welle.
Chancellor Friedrich Merz described the package as a historic health care reform and one of the most ambitious welfare changes in decades.
He said the plan would save more than €16 bn and prevent another sharp rise in statutory health insurance premiums.
The agreement arrives as Merz faces pressure to deliver reforms across Germany’s expensive health system. His CDU governs with the SPD in a strained coalition, and the health care package has already exposed tensions inside the alliance.
Finance Minister Lars Klingbeil said coalition talks had become heated at times, though he argued the agreement showed the government still has the ability to act.
Health Minister Nina Warken also framed the draft law as a fast and ambitious response to rising pressure on insurers.
Germany’s statutory health insurers face widening deficits despite rising contributions. Contributions have already increased by 3% this year.
At current income and cost levels, the gap between insurer revenue and expenses would rise from €15.3 bn in 2027 to €40.4 bn in 2030.
The draft law seeks to connect spending more closely to actual insurer income. Its measures include a tax on sugary drinks from 2028, expected to raise about €450 mn per year for prevention programmes.
That revenue would stay within the health system rather than move into the federal budget.
Patients would also pay more for prescription medicines, as insurer subsidies decline. The federal government would gradually take over health insurance costs for unemployed people, a burden currently carried by statutory insurers and estimated at about €12 bn per year.
The package also changes premium-free coverage for some non-working domestic partners.
A 2.5% premium would apply, with exemptions for families with children under seven, parents of severely disabled children, family caregivers, retirees, spouses, and partners with full loss of earning capacity.
The draft law excludes cannabis flowers and homeopathic remedies from statutory health insurance coverage. It also cuts administrative and advertising spending at statutory insurers, while capping compensation for executives at insurers, state associations, medical services, and physicians’ associations.
Doctors’ groups and patient advocates have criticised the package sharply. Klaus Reinhardt, president of the German Medical Association, said the plan looks less like a historic reform and more like a large savings package. He argued insured people would carry a one-sided burden.
Verena Bentele, president of the VdK welfare association, said the government presents the reform as premium stabilisation, while the actual effect is benefit reduction. She described the package as an austerity programme funded by insured people.
Patient protection representatives also questioned the federal government’s limited role in supporting statutory insurers.
Critics argue the draft law does not spread costs fairly and instead shifts more pressure onto patients and contributors.
The Bundestag debate will decide whether the package remains intact. For insurers, the reform targets cost control. For patients and doctors, it raises a more direct concern: lower premiums risk coming with narrower benefits and higher out-of-pocket costs.
