Health ministry · Financing
Who pays for German healthcare, and how much longer?
In 2025, statutory health insurance spending grew by 7.8% while revenue grew by 5.3%. That gap is the central problem of the health ministry Carsten Linnemann took over in July 2026. This page follows the money, from pay slip to health fund to hospital, and sets out what has been decided, what is proposed and what is still open.
- GKV revenue 2025
- €355.9bn (preliminary, BMG)
- GKV spending 2025
- €352.4bn (preliminary, BMG)
- General rate
- 14.6% of gross wages (since 2015)
- Avg. additional 2026
- 2.9% official · 3.13% charged on 1 Jan 2026
- Avg. additional 2027
- Not yet set: estimators meet 15 Oct 2026
From pay slip to provider
Since 2009 almost all GKV money has passed through one central pool, the health fund (Gesundheitsfonds).
- Contributions14.6% of gross wages up to the income ceiling, split equally between employer and employee, plus the fund’s additional contribution, also split equally.
- Federal subsidyA tax-funded payment for tasks of society as a whole, such as family co-insurance; set by law, with additional payments for recipients of basic income support.
- Health fundManaged by the Federal Office for Social Security (BAS); holds a liquidity reserve (€7.1bn on 15 Jan 2026).
- Risk adjustmentEach fund receives a payment per insured person, adjusted for age, sex and illness (Morbi-RSA).
- 93 insurersPay hospitals, practices, pharmacies and others; set their own additional contribution if the allocations do not cover their spending.
The design has one important consequence. Insurers compete only through the additional contribution, so any gap between allocations and spending shows up directly on members’ pay slips. In autumn each year an estimators’ group (Schätzerkreis) of the BMG, the BAS and the GKV-Spitzenverband forecasts the next year’s revenue and spending. The ministry then publishes the “average additional contribution” needed to close the gap. It is a benchmark, not a binding rate. In 2026 the funds charged well above it: 3.13% on 1 January 2026, against the official 2.9%.
The 2025 accounts
The funds made a small surplus after raising contributions, but their reserves are below the legal minimum and spending is growing faster than revenue.
GKV revenue and spending, 2025
SourceBMG, press release 10 Mar 2026 (revenue, expenditure); vdek based on BMG statistics KV45 (benefits, hospitals, medicines; secondary source).
Growth on the previous year, 2025
SourceBMG, press release 10 Mar 2026; benefits growth: vdek (BMG KV45). vdek gives +9.1% for hospitals and +5.7% for medicines on a slightly different basis.
| Item | Value | Note |
|---|---|---|
| Surplus of the insurers | +€3.5bn | 2025, after contribution increases at the start of the year |
| Result of the health fund | −€0.6bn | 2025 deficit |
| Health fund liquidity reserve | €7.1bn | 15 January 2026 |
| Insurers’ reserves | €5.1bn | 0.18 of a month’s spending; legal minimum is 0.2 |
Source: Federal Ministry of Health, GKV financial results 2025, 10 March 2026.
The additional contribution keeps rising
The general rate has stayed at 14.6% since 2015. All the movement is in the additional contribution.
Average additional contribution: official benchmark and actual average
SourceBMG (2025 benchmark, announced Nov 2024; 2026 benchmark: Bundesanzeiger BAnz AT 10.11.2025 B7); actual averages: BMG press release, 10 Mar 2026. The 2027 benchmark will be set after the estimators’ meeting on 15 Oct 2026.
What the 2027 figure will depend on
The 2027 average additional contribution has not yet been set Open question. Press forecasts before the meeting ranged from 3.3% to 3.9%. A medium-term BMG estimate without reforms reportedly pointed to 3.65–3.75%. None of these is an official figure.
The outcome depends on three factors. The first is how much of the stabilisation law’s roughly €19 billion relief the estimators actually count. The second is the further savings Linnemann has announced, which the Health Committee was told are aimed at this very meeting. The third is whether the funds rebuild their reserves, which were below the legal minimum at the end of 2025, through higher rates.
A rough guide to what this means for a pay slip: with the general rate of 14.6% and the official 2026 average of 2.9%, health insurance takes 17.5% of contributory income, half from the employee and half from the employer. Long-term care insurance (3.6%) and pension insurance (18.6%) come on top. This combined burden is what Linnemann means when he talks about non-wage labour costs.
Four forces behind the gap
Why spending outpaces revenue, even in years when wages rise.
Demographic pressure
One in five people was 67 or over in 2024; Destatis projects one in four by 2035. Older people use more care, and pensioners pay contributions on lower incomes. The working-age population (20–66) of 51.2 million is projected to fall to between 37.1 and 45.3 million by 2070.
A narrow contribution base
Contributions are paid only on earnings and pensions up to the ceiling. Employment subject to social insurance fell by 84,000 year on year to 34.68 million in July 2026 (BA). When employment weakens, revenue weakens with it, even if pay per head rises.
Prices and volumes
Health expenditure rose by 7.6% in nominal terms in 2024 but only 3.9% in real terms (Destatis). About half of the increase was price effects, such as wage agreements in hospitals and care, energy and materials; the rest was more and costlier treatment.
Innovation and hospitals
The two largest items grew fastest in 2025. Hospital treatment rose by about 9.6% to around €111.5 billion. Medicines rose by 5.9% to €58.3 billion, driven largely by new patented products.
The federal health budget for 2027
Linnemann’s first budget debate, on 10 September 2026, was about a sharply smaller ministry budget.
Federal Ministry of Health budget
SourceFederal Government / Deutsches Ärzteblatt reporting on the 2027 budget debate, 10–11 Sep 2026. Final Bundestag vote expected in November 2026.
The main reason for the fall is that one-off items are ending. Budget reporting cites the end of a €2.3 billion loan and a €2 billion cut in the federal subsidy to the health fund. The ministry’s July 2026 release on the stabilisation law gives a different breakdown: a cut of €1.35 billion in 2027 and €1.55 billion from 2028. The two sources use different reference points, so we report both rather than pick one.
In return, the federal government will pay more for recipients of basic income support, whose GKV contributions have long been considered too low to cover their costs. That is In force through the stabilisation law.
Additional federal payments for recipients of basic income support
SourceFederal Ministry of Health, press release on the GKV-Beitragssatzstabilisierungsgesetz, 10 Jul 2026.
Savings laws and structural reform
What has been decided, what is proposed and what is still under review.
- Inherited
- Under review
- Proposed
- In implementation
- In force
GKV-Beitragssatzstabilisierungsgesetz
Passed by the Bundestag on 10 July 2026 (319 to 286) and approved by the Bundesrat, under Nina Warken. It is designed to give around €19 billion of relief in 2027; one secondary source gives €18.8 billion. Main measures: the statutory manufacturer discount on medicines rises to 15.5%; patented vaccines get an extra discount and a price freeze to 2030; hospital price growth is held down in 2027–2029; homeopathy is removed from the benefits catalogue; and federal payments for recipients of basic income support rise step by step. Warken said at the time that the law laid the foundation for stable finances after years of rising contributions.
“Spargesetz 2”: a second savings package
Announced by Linnemann at the government question time on 23 September 2026. It would pay for commitments made since the first law, including roughly €450 million for hospitals and €100 million for university clinics as reported (the BMG summary gives about €495–550 million combined), and improvements in psychotherapy, which he said needed serious counter-financing. Its declared purpose is to keep contribution rates stable in 2027. No bill text has been published.
Information duty on contribution increases
The savings package abolished insurers’ duty to write to each member when they raise their additional contribution, to save postage and printing. On 20 September 2026 Linnemann said the duty should return, digitally or in writing. Consumer groups had warned that members might otherwise miss their special right to switch funds. See statutory health insurance.
Structural reform: Finance Commission
According to the Bundestag press service, a Finance Commission for health insurance is to present further structural reform proposals in December 2026. Linnemann has said he wants contribution rates eventually to fall (FAZ, September 2026). How this would be achieved, through steering, fewer funds, more tax funding or benefit changes, is not yet clear.
Long-term care insurance (PNOG)
A separate but parallel problem: social long-term care insurance ran a deficit of €0.49 billion in 2025 (revenue €73.33bn, spending €73.82bn; BMG). Linnemann expects a deficit of €8 billion in 2027 and more than €15 billion in 2028. The cabinet bill of 30 September 2026 raises revenue mainly through a higher surcharge for the childless and a higher income ceiling. See nursing.
Contain costs or widen the base?
The two broad strategies for closing the gap, and their risks.
Contain spending (Linnemann’s emphasis)
- Keeps non-wage labour costs down, which matters for employment and competitiveness.
- Targets areas where capacity is high and occupancy low: hospital beds were 72.0% occupied in 2024 (Destatis).
- Steering through primary care can avoid duplicate tests and unnecessary hospital stays.
- Cutting bureaucracy frees staff time without cutting benefits.
Widen revenue (the alternative view)
- Ageing makes some spending growth unavoidable; savings laws only buy time.
- Paying fully for tasks of society as a whole (such as basic-income recipients) from taxes would relieve contributors.
- Including other incomes or the PKV would widen the base; Linnemann rejects abolishing the PKV.
- Hospital cost brakes risk more operators making losses; the Krankenhaus Rating Report 2026 expects 60% loss-making in 2027 in this scenario.
Both strategies are pursued in part. The stabilisation law combines cost brakes with higher federal payments. The structural choices are expected from the Finance Commission (December 2026) and the care commission (early 2027).
Sources & further reading
- Federal Ministry of Health — GKV financial results 2025 (10 Mar 2026)
- Bundesanzeiger — Average additional contribution 2026 (BAnz AT 10.11.2025 B7)
- vdek — GKV benefit expenditure (2026)
- vdek — GKV drug expenditure (2026)
- Federal Ministry of Health — Bundestag passes GKV-Beitragssatzstabilisierungsgesetz (10 Jul 2026)
- krankenkasseninfo.de — Forecasts for the 2027 additional contribution (unofficial)
- Federal Government — Speech on the 2027 health budget (10 Sep 2026)
- Deutsches Ärzteblatt — Linnemann sets out guiding principles (11 Sep 2026)
- apotheke adhoc — Linnemann plans “Spargesetz 2” (Sep 2026)
- German Bundestag, hib 733/2026 — Minister in the Health Committee (23 Sep 2026)
- ZDF — Linnemann on the information duty (20 Sep 2026)
- Destatis — Health expenditure 2024 (2 Apr 2026)
- Destatis — Health expenditure, real growth 2024 (Jul 2026)
- Federal Employment Agency — Labour market, September 2026
- DKG / das Krankenhaus — Krankenhaus Rating Report 2026
- Federal Ministry of Health — Long-term care insurance, facts and figures (Jul 2026)