Conciliation committee reaches compromise on Warken's health insurance savings package

Following optimism ahead of the meeting, the Bundestag-Bundesrat conciliation committee has agreed on a compromise for Health Minister Nina Warken's savings law to stabilize health insurance contributions and avert hikes from 2026. States and federal government expect Bundesrat approval on Friday.

The conciliation committee, in its first meeting this legislative period, reached a compromise on clinic spending limits, clearing the path for Warken's (CDU) €2 billion savings package—previously blocked by the Bundesrat—with €1.8 billion from clinics. Remuneration increases will be capped at actual cost rises in 2026 to address health fund budget gaps.

Co-chair Manuela Schwesig (SPD, Mecklenburg-Vorpommern) hailed it as a «good compromise» and anticipates Bundesrat approval, given states' agreement. States secured confirmation that the €1.8 billion savings are one-time; from 2027, the remuneration base adjusts, as co-chair Hendrik Hoppenstedt (CDU) noted, backed by a federal protocol declaration.

Warken emphasized the short-term measure reduces pressure for 2026 contribution hikes but sets no precedent; a broader package is eyed for 2027. Greens' Janosch Dahmen criticized it as a «complicated shell game,» warning of potential hikes, clinic uncertainty—especially rural ones—and unfulfilled promises.

Health funds are setting 2026 additional contributions (average 2.9% atop 14.6%), with warnings of likely increases to rebuild reserves despite the package. Significant adjustments occurred in early 2025.

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German Social Minister Bärbel Bas presents welfare reform proposals to reduce bureaucracy and digitize benefits.
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German government proposes social welfare reform

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The black-red coalition plans a comprehensive modernization of the social system to reduce bureaucracy and digitize processes. A commission with representatives from the federal government, states, and municipalities has developed 26 recommendations, which Federal Social Minister Bärbel Bas will present on Tuesday. Planned are fewer authorities, merged benefits, and automatic child benefit, without cuts to social assistance.

Following recent coalition consultations, Federal Health Minister Nina Warken expressed optimism about her savings package to ease pressure on health insurance funds. The mediation committee meets on December 17 to resolve the stalled law, averting potential contribution hikes for millions in 2026.

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The leaders of Germany's CDU, CSU, and SPD coalition announced the results of their overnight consultations in the Federal Chancellery on Thursday morning. Topics included looming increases in health insurance contributions, infrastructure expansion, and pension reforms. The party heads highlighted progress on several contentious issues.

Following Parliament's unanimous adoption of a special finance law on December 23, 2025, to bridge funding amid failed 2026 budget talks, Prime Minister Sébastien Lecornu insists a compromise remains possible in January. Yet, the measure—echoing last year's—prolongs uncertainty rooted in the June 2024 National Assembly dissolution, with significant fiscal and political costs.

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The Senate's finance commission adopted a series of amendments to the 2026 budget draft on Monday, November 24, aiming for lower corporate taxes and more savings while keeping the deficit target at 4.7% of GDP. Amid the blockage in the National Assembly, Prime Minister Sébastien Lecornu called for votes on absolute priorities such as defense and agriculture. The Senate also rejected government-proposed restrictions on sick leave.

The Senate's Finance Committee started reviewing the public sector readjustment bill, presented by Finance Minister Nicolás Grau. Deputies approved a 3.4% gradual salary increase but rejected the 'tie-breaker norm' aimed at greater job stability. Opposition anticipates rejecting that provision again in the Senate.

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Prime Minister Sébastien Lecornu announced several measures on Friday evening to amend the 2026 budget project, hoping to secure a compromise with opposition parties and avoid censure. Key announcements include an increase in the activity bonus and the abandonment of unpopular tax reforms. He has given himself until Tuesday to finalize an agreement, without specifying whether he will use Article 49.3 or ordinances.

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