German Public Health Insurance Heading For a €40bn Annual Deficit

Germany’s public health insurance system (GKV) closed 2025 with a €0.6 billion shortfall. The gap is set to grow into the tens of billions unless reforms take effect before 2027.

The Federal Ministry of Health (Bundesgesundheitsministerium) published the preliminary full-year results for 2025 on March 10, 2026. The numbers confirm a two-year trend:

• GKV spending grew by 7.8%, while contribution revenues rose by only 5.3%.
• Total expenditure reached €352.4 billion against revenues of €355.9 billion.

The 93 statutory health insurers individually posted a combined surplus of €3.5 billion. Health insurers are legally required to use the surplus to rebuild their financial reserves.

The insurers must maintain a minimum reserve of 0.2 months of expenditure. As of end-2025, the reserves stood at only 0.18 months.

The main cost drivers are

• Hospital treatment jumped 9.6%. This is more than double the long-run average for that category.
• Outpatient doctor visits rose 7.6%
• Pharmaceutical spending increased by 5.9%
• Nursing staff costs rose by 12%.

The forecast is double-digit deficits for the public system from 2027

The FinanzKommission Gesundheit, estimates a deficit of €40 billion by 2030 if no structural reforms are implemented. For 2027 alone, the projected gap is between €12 and €15 billion.

Without any reform, the increasing costs will be passed to you via increase in monthly premium. Social security contributions as a whole are already above 42% of gross income and rising.

Report on the future of German health system ->

On March 30, 2026, the FinanzKommission delivered its first report to the Ministry. It contains 66 recommendations with a combined savings volume of €42.3 billion.

Main highlights of the new reforms and how they affect you ->

How do you prepare for the increase in the public health insurance costs?

If you are employed and publicly-insured:

• Check your insurer’s current additional contribution and compare it with more affordable alternatives. you can calculate the potential savings here.
• If your insurer sent you a notice of a premium increase, you have a special right to terminate the contract and switch to a cheaper public insurer.

Cheapest public health insurer in Germany ->

If you are a freelancer or self-employed:

• If your income is above the income ceiling (Beitragsbemessungsgrenze, €5,512.50/month in 2026), consider switching to private health insurance.

Health insurance for self-employed in Germany ->

Regardless, start saving for your medical expenses after retirement. Whether the public insurance can cover 100% medical costs after 30 years is unclear.

The easiest way to start is to open a free ETF savings plan and start investing on auto mode.

During our research, we found Scalable Capital*, SmartBroker+*, or Finanzen.net Zero* as the best online brokers in Germany. You can compare all online brokers in Germany and explore their key features here.