German health reforms fail to please

The German coalition government's agreement on the key points of a new reform of the health system, reached after weeks of negotiation and culminating in an all-night session of talks, has already triggered a political row.

The central decision is that health fund contribution rates will rise in 2007 by an average of 0.5%. Daniel Bahr the health care spokesman for the opposition liberal Free Democrats Party, described the rise as a "marked increase" and the compromise agreement as "appaling."

Coalition Christian Democrats (CDU) and Social Democrats (SPD) were largely united behind the reforms. For its part, the CDU is seen to be satisfied that the private health insurance sector remains largely unaffected by the reform program, at least in the early stages. Instead of immediately injecting taxes into the health service, as originally proposed by the SPD, the new central health fund will receive 1.5 billion euros ($1.92 billion) from the federal budget in 2008, doubling to 3.0 billion euros the following year. From 2009, all children's health care will be covered by this fund with 14.0 billion euros from the state and an additional 2.0 billion euros from the private insurance sector.