Germany's coalition agrees over health reforms

5th October 2006, Comments 0 comments

5 October 2006, BERLIN - Germany's ruling coalition reached an agreement Thursday to reform the nation's ailing health care system, ending months of squabbling which tested Chancellor Angela Merkel's political authority. Health Minister Ulla Schmidt spoke of a "great reform," but opposition parties, health insurance companies and the DGB trade unions federation criticized the new scheme. "It is a far-reaching structural change that will improve the quality of health care," Schmidt said. "The reforms will a

5 October 2006

BERLIN - Germany's ruling coalition reached an agreement Thursday to reform the nation's ailing health care system, ending months of squabbling which tested Chancellor Angela Merkel's political authority.

Health Minister Ulla Schmidt spoke of a "great reform," but opposition parties, health insurance companies and the DGB trade unions federation criticized the new scheme.

"It is a far-reaching structural change that will improve the quality of health care," Schmidt said. "The reforms will also increase competition among health insurance companies."

Germany has more than 250 public health insurance companies, who fear the new financing scheme will result in a consolidation of the market and lead to an increase in costs and bureacracy.

The German health service, one of the world's most expensive, has been hit by an ageing population and recent high unemployment. It is projected to chalk up a shortfall next year of about 7 billion euros (9 billion dollars).

The Chancellor announced the compromise early Thursday after seven hours of negotiations between her Christian Democrats (CDU) and their grand coalition partner, the Social Democrats (SPD).

The reforms modify the way funds are distributed between profitable and unprofitable public health insurers, redefine the role of private insurers and allow people to transfer between schemes.

The changes will come into place on April 1, 2007, but without one of the key components, a so-called health fund to pool the contributions of members, which will be launched in January, 2009.

The opposition Green Party leader Reinhold Buetikofer dismissed the agreement as "a mockery," while DGB chairman Michael Sommer called it "the lowest common denominator."

Volker Leinenbach, head of the Association of Private Health Insurers (PKV), said the changes would have financial consequences for his members and "will not resolve the major health issues."

Some 8.4 million Germans are covered by private health insurance, compared to 70 million who are enrolled in public schemes, paying 14.2 per cent of their gross pay as contributions, half of which is met by employers.

Billed as the centrepiece of the Merkel government's reform agenda, the health plans have contributed to a big slump in support for the CDU, with one recent poll showing its popularity tumbling to its lowest level since German unification 16 years ago.

The reforms also enraged many CDU state premiers, who feared that prosperous insurers in their regions would have to pay more to poorer states as part of the reform deal.

Merkel pledged to reform the health system when she forged the grand coalition, following inconclusive national elections in September last year.

But infighting within the coalition over details of the changes and criticism from outside led to a delay in implementing the new scheme, raising questions about her authority.

Following increasing attacks on Merkel by CDU state premiers, her spokesman was forced Monday to deny that there were moves to isolate the chancellor. He insisted that she felt supported by her party colleagues.

The conflict over the health reform plans had already forced the government to backtrack and delay the scheme's introduction by three months until April 1.

DPA

Subject: German news

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