The government threatens to liquidate insurance companies to save money
The statutory health insurance system in Germany is suffering from a serious financial deficit, with a deficit of about 6.2 billion euros in 2024, which could double by 2027. Citizens and employers together pay 17.5% of the gross salary for health insurance, resulting in an income of 320.6 billion euros in 2024, but expenses have exceeded revenues.
In light of this crisis, the Merz government is looking for solutions and has begun to move towards a radical option of closing some health insurance funds. Klaus Holtschik, head of the CSU parliamentary group in the Bavarian Parliament, stated that it is unacceptable to continue funding around a hundred legal insurance companies despite the huge deficit. The head of the SPD parliamentary group in North Rhine-Westphalia, Joachim Ott, also supported this idea, considering that reducing the number of funds while increasing the number of subscribers would provide a stronger financial base.
Stefan Belsinger, Vice President of the Health Committee in the German Parliament, confirmed the existence of significant efficiency problems within insurance companies, calling for a review of their expenses, especially regarding administrative costs. The insurance crisis is not new, as treatment costs have risen by 8% in 2024 alone. Former Health Minister Karl Lauterbach attributed the worsening deficit to inflation and the rising costs associated with it. Current Health Minister Nina Warken (CDU) confirmed in May 2025 that she intends to support the health fund with 800 million euros, but emphasized in a conversation with FAZ that she is striving at all costs to avoid increasing contributions, warning that rising social contributions harm economic growth.
Nevertheless, the government did not commit to increasing the necessary financial support. When asked by Farken whether the state would cover ten billion euros, which is the amount allocated to secure beneficiaries of Bürgergeld, she refused to give a definitive answer, emphasizing that the matter would be discussed with the Minister of Finance, but she stressed that reforming the healthcare system cannot be done solely through the state budget.
In June 2025, the Merz government adopted the 2025 budget draft, the initial allocations for 2026, and a special fund plan for infrastructure. This decision disappointed the heads of insurance company associations. Both Uwe Clemens and Dr. Susanne Wagenmann, chairpersons of the GKV-Spitzenverband, stated that expenses not directly related to insurance funded by the funds should be borne by the state, not the contributors.
The main aim here is to cover health care for Bürgergeld beneficiaries as well as to finance pension contributions for family members who provide care. Despite these demands, the Merz government announced its intention to address financial issues in health insurance and social care through loans, which the union strongly criticized, describing the decision as ineffective and exacerbating future burdens.