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German Parliament Passes Health Care Reform

The German parliament officially passed Health Minister Phillip Roesler's health reform bill on November 12, 2010. Health care system changes include increases to public insurance premium contributions starting in January 2011—from 14.9 percent of employees’ gross income to 15.5 percent of income. Contributions are to be split between employers and workers, at 7.3 percent and 8.2 percent respectively. Previously, premiums had been split equally between employers and workers. This premium contribution increase is expected to bring in an extra €6 billion per year.

Health insurance has been mandatory for all citizens since 2009, either through the public or private market. All employed citizens earning less than €4,163 (US$5,262) per month or €49,950 (US$63,142) per year (in 2010) are covered by a mandatory public health insurance scheme. The new law allows public insurers that have a deficit to charge an additional fee from each member, ranging approximately from €8 to €15 per month. Sixteen insurance companies levied additional payments in 2010. Minister Roesler believes that the law will help ease the burden of an aging population and the rising cost of treatments, helping to close up an €11 billion deficit in the public health care system.

The law will also end pharmaceutical companies’ ability to price their drugs freely. Pharmaceutical companies will be able to charge their own prices on brand-name drugs during the drug’s first year of marketing. But within this first year, drug companies must negotiate pricing with health insurers for subsequent years. If an agreement is not met within this time frame, Germany’s independent drug and medical treatment review body, the Institute for Quality and Efficiency in Healthcare, will have the authority to assess the drug’s cost-effectiveness and make recommendations for pricing. Minister Roesler said that this will help to create a balance between giving people having access to the latest medications and controlling drug costs.

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