At the start of 2025, Germany saw social security contributions for pensions, unemployment, health, and care insurance reach an unprecedented average of 42.3% of income.
This level exceeds the 40% cap previously targeted by both current and former federal governments, breaking the last record set in 1997-1998 at 42.1%.
Most statutory health insurance providers, 82 out of 94, raised their contributions, some significantly more than anticipated. The average additional contribution climbed from 1.7% in 2024 to 2.9%, with some insurers like Techniker Krankenkasse and Barmer now charging additional rates of up to 4%. Coupled with the base rate of 14.6%, overall contribution rates often exceed 17%. The income threshold for contribution assessment also increased from €5,175 to €5,512.50.
Contributing to the rising costs, long-term care insurance rates were raised by 0.2 percentage points, now standing at 3.6% of contributory income. Further hikes are expected, with plans for 2026 increases to fund upcoming hospital reforms.
The hospital reform includes a €50 billion transformation fund split between federal and state governments. However, the federal share is set to come from statutory health insurance funds, passing the burden onto contributors. While the reform aims to reduce unnecessary treatments by prioritizing essential medical needs, critics worry it could exacerbate long wait times and compromise care quality.
Eugen Brysch of the German Patient Protection Foundation expressed concerns: “Important examinations and necessary treatments could take a back seat due to cost pressure.”
A significant funding shortfall of €14 billion looms over statutory health insurance (GKV). One key factor is the “citizen’s benefit,” with 5.5 million recipients—only half of whom are German citizens—not directly contributing to the system. In 2022, GKV spent €15 billion on citizen benefit recipients while receiving only €5.9 billion in government subsidies, leaving a €9.2 billion deficit.
The mounting strain on Germany’s social security system highlights the need for sustainable solutions. As taxpayers shoulder the escalating costs, questions remain about balancing fiscal responsibility and maintaining high-quality healthcare.
