German Health Insurance Reform Stumbles Over Hidden Administrative Costs

Germany's federal government is pursuing a health insurance reform that aims to stabilize contribution rates and curb spending, while the CDU proposes cutting the number of statutory health insurance funds (GKV) to ten‑to‑twenty. According to consultant Steffen Moldenhauer, the consolidation of funds has not delivered savings; instead, administrative expenses are far larger than officially reported. The Federal Health Ministry estimates net administrative costs at €12.63 billion for 2024, but a deeper accounting that includes personal administration, IT infrastructure, pension liabilities and other system‑wide expenses puts the total nearer €30 billion.

Critics argue that focusing on the number of insurers ignores the true lever for reform—streamlining processes, data, IT and reducing concealed system costs. The proposed cuts risk merely reshuffling existing burdens, as highlighted in a statement from the CSU that costs must be fairly distributed between health and long‑term care insurers. Without addressing the hidden administrative load, the reform is expected to fall short of delivering meaningful efficiency gains.