Billion holes in the social security system are becoming a problem for the traffic lights

Berlin The German Nursing Council went straight to the limit. For skilled workers there must be a starting salary of 4,000 euros, demanded the chairwoman Christine Vogler on Wednesday at the German care day. This is the only way to counteract the shortage of staff in the industry.

The grand coalition had just passed a kind of tariff loyalty law for care, which will drive up personnel costs. And just a few days ago, the federal government injected a billion euros for the first time to save care funds from bankruptcy.

It is not the only construction site of the welfare state that the SPD, Greens and FDP have to take care of when they form the next government. As the group of appraisers announced on Wednesday, the statutory health insurances (GKV) will need a further seven billion euros from the federal government in addition to the already promised 21.5 billion euros. The body includes the National Association of Statutory Health Insurance Funds, the Federal Social Security Office and the Federal Ministry of Health.

Overall, the financial needs of the health insurances amount to 28.5 billion euros for the coming year. The funds are necessary to keep the additional contribution for insured persons stable at an average of 1.3 percent. Higher contributions would mean that social security contributions would exceed the 40 percent mark.

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“We expect the federal government to quickly provide a corresponding federal grant – and thus avert the risk of increasing additional contributions across the board in the next year,” said the chairman of the board of directors of the National Association of Statutory Health Insurance Funds, Volker Hansen. “The Federal Minister of Health now has to quickly get the relevant ordinance off the ground.” Minister Jens Spahn (CDU), in turn, announced on Wednesday that a statutory ordinance would be submitted quickly and that it would be coordinated with the Federal Ministry of Finance.

Electronic health card

The deficit in the statutory health insurance is growing.

(Photo: imago images / Martin Bäuml Fotodesign)

Pension insurance is also increasingly becoming a subsidy business because the contributions from the pay-as-you-go system are no longer sufficient to cushion the aging of society and to pay for the expansion of benefits initiated by the grand coalition.

The tax subsidy for pension insurance exceeded the 100 billion euros mark for the first time last year and, according to the federal financial plan, is expected to rise to almost 120 billion euros by 2024.

The future federal government will therefore probably have to sell the citizens widespread contribution increases – or pass an even larger share of the costs of demographic change and medical advances on to taxpayers.

It is all the more surprising that the dramatic situation of social security in the federal election campaign did not play a major role, although the election manifestos of the traffic light parties contain very different approaches to solving the financial problems.

In the health sector, the SPD and the Greens now see the opportunity to implement the citizens’ insurance that has been required for years and to broaden the contribution base. Civil servants, self-employed, entrepreneurs and members of parliament should also pay into the statutory health insurance – depending on their salaries and capital income.

The FDP, however, relies on more competition between health insurers and wants to simplify the switch between private and statutory insurance. In order to strengthen long-term care insurance, the Liberals are calling for a three-pillar model made up of company and private provision and the existing pay-as-you-go system.

However, it is controversial whether the health system would actually be better financed by ending the coexistence of private and statutory health insurance. The German Economic Institute (IW), which is close to the employer, has calculated that citizens’ insurance would actually mean lower contributions for those who are legally insured today in the first six years, but afterwards they would be back at today’s level.

An expert opinion by the Bremen professor Heinz Rothgang on behalf of the left-wing parliamentary group, however, comes to the conclusion that the contribution rate would be up to 3.5 percentage points below the status quo if everyone paid into the citizens’ insurance and every form of income was taken into account.

The ideas of the possible traffic light coalitionists also diverge in pension policy. The SPD and the Greens promise a long-term stable pension level of at least 48 percent, which can only be achieved with higher employment, increasing contributions, a larger tax subsidy or an increase in the retirement age. The FDP calls for entry into an additional funded pillar, which, however, requires a savings phase and does not solve any short-term financing problems.

These problems are serious even without further expansion of the service. In the summer, the Ifo Institute in Dresden calculated how the aging of society and the pension reforms adopted by the grand coalition since 2013 will affect finances. Using a model calculation, they examined how much the VAT rate would have to rise if the expected additional costs were to be financed through this tax alone.

Accordingly, it would have to increase from the current 19 percent to 23 percent in 2030. By 2050 it would be 27 percent, with three quarters of the increase being due to aging and a quarter to the reforms between 2014 and 2020.

Germany has also long lived beyond its means in the health sector. In the period from 1999 to 2019, the contribution-based income of the statutory health insurance per member grew by almost 1.8 percent, while the expenditure per insured rose by an average of 3.2 percent.

Private health insurance study: federal subsidy would have to increase enormously

If you extrapolate this development into the future, as the Scientific Institute of Private Health Insurance (PKV) has done, the results are impressive: Should the health insurance contribution be kept stable so that the social contributions do not exceed the 40 percent mark overall , the federal subsidy would have to increase to a good 83 billion euros in 2030 if the contribution and cost development is assumed. In the sum of the years 2022 to 2030, a total of almost 472 billion euros in additional tax funds would be required.

IW economist Jochen Pimpertz makes a reform proposal: “One way to preserve justice between the generations would be to freeze the service expenditures to be financed in solidarity through contributions and to build a second pillar in the statutory health insurance.”

Within this, the insured would then have the choice between different supply models and could thus influence the premium level themselves. However, it is to be feared that a traffic light coalition will tend to agree on other, supposedly simple ways to support the statutory health insurance – such as an increase in the assessment limit.

Not only the corona crisis is a cost driver

The reason for the escalating costs is not only due to the corona laws, for which the health insurers spent 4.4 billion euros last year alone. According to the AOK Federal Association, the reform laws initiated by Health Minister Jens Spahn (CDU) between 2019 and 2022 cause additional expenditure of almost 33 billion euros.

Long-term care insurance faces a problem similar to that of health insurance. The federal grant that has now become necessary has to do primarily with the corona pandemic. But by 2022, the deficit of the long-term care insurance funds could grow to three billion euros, according to the AOK Federal Association. Without a subsidy of the appropriate amount, there would be a risk of premium increases.

And new demands that were made on the care day have not yet been taken into account.

More: What the healthcare system will face after the election

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