German gov’t cuts health care spending, increases premiums in health care reform package

Germany cuts health care spending, raises premiums

BERLIN — Germany will raise premiums and cut spending on health care in an effort to plug an euro11 billion ($13.9 billion) hole in the country’s health care system.

Chancellor Angela Merkel’s center-right coalition had pledged to give the German health system a significant overhaul.

It decided Tuesday to increase premiums from 14.9 to 15.5 percent of workers’ gross pay. Contributions will be split between employers and employees.

The hikes — which are expected to rake in about euro6 billion ($7.6 billion) — will be coupled with around euro3.5 billion in cuts spread out among hospitals, insurers and pharmaceutical companies.