Germany's Social Insurance Costs Reach Record High, Prompting Calls for Reform

Soaring contributions to health and care insurance push the total labor cost burden to a historic 42.3% of gross wages, sparking criticism from unions and employers alike.

• Social insurance costs in Germany have reached a historic high, with contributions now accounting for 42.3% of gross wages, driven by sharp increases in health and care insurance rates.
• The average additional health insurance contribution rose to 2.9% in 2025, significantly exceeding the 2.5% increase announced by the government, leading to widespread dissatisfaction among workers and businesses.
• Critics, including employer associations and unions, argue that the rising costs erode net wages and jeopardize Germany's economic competitiveness, calling for urgent government action to address systemic inefficiencies.
• The financial strain on health insurance providers stems from years of policy decisions that depleted reserves, leading to increased contributions to refill these funds and support reforms like hospital restructuring.
• Projections suggest that without substantial reforms, social insurance costs could surpass 50% of gross wages within the next decade, raising concerns about long-term affordability for both employees and employers.

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Frankfurter Allgemeine Zeitung Augsburger Allgemeine