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Germany's CSU Rejects Health Care Charge Proposal

Monday, February 15, 2010

Vehemently opposed to the introduction of a health care charge in Germany, Bavaria’s Christian Social Union (CSU) has called the government’s commission on health care reform into question.

Sparking yet another major furore, Bavaria’s Minister for Health Markus Söder has announced that the CSU will not agree to, nor will it entertain the idea of, such a tax.

According to Söder, the government’s commission should focus instead on controlling expenditure in order to reduce the EUR4bn deficit, and on improving patient provision.

Without the support of Bavaria’s CSU, the coalition government will not have the necessary majority in parliament to adopt the reform.

Söder’s remarks have increased pressure from the CSU on government Health Minister Philipp Rösler, steering the reform. Under the current proposal, a standard legal health insurance contribution would be imposed on all individuals in Germany, irrespective of their earnings. To redress the obvious social imbalance here, a subsidy would be provided from state tax revenue. Full implementation of this system is estimated to cost the government in the region of between EUR20bn and EUR35bn a year.

Given Germany’s record level of state debt, its ability to finance these plans currently appears totally unrealistic. However, Health Minister Rösler has emphasized his intention to embark on the first stages of this reform, and has also indicated that the government’s commission will establish the specific details of the proposals.

Alluding to recent figures from the Finance Ministry, suggesting that the top rate of tax would have to rise to 73%, Söder argued that the introduction of a health care charge would inevitably place an enormous burden on both individuals and businesses.

Responding to calls from the Christian Democratic Union to reduce the rate of value-added tax applied to medicines, Rösler made known in a separate announcement his determination to lower the cost of medicine.