Council of Economic Experts urges sweeping GKV reform and cohort‑funded care overhaul in Germany
Germany’s Council of Economic Experts calls for sweeping GKV reform, proposing civil servants join the statutory system, a cohort-funded care reserve, and cuts to untargeted care subsidies.
Germany’s top economic advisory body has proposed a far-reaching overhaul of the statutory health insurance (GKV) and long‑term care system that goes beyond current government plans. The spring report recommends including newly hired civil servants in the GKV from 2027, shifting funding rules and creating a cohort‑specific capital fund for future care costs. The package is aimed at stabilizing rising contribution rates and limiting the economic drag of mounting social insurance payments.
Inclusion of civil servants in the GKV from 2027
The Council proposes that civil servants recruited from 2027 be enrolled in the statutory health insurance as a way to broaden the contribution base. According to the report, this step would shave roughly 0.05 percentage points off the overall contribution rate by 2030 and 0.19 percentage points by 2040. The recommendation challenges longstanding exemptions that have left many state employees in private insurance with supplemental allowances funded by federal and state budgets.
Projected contribution increases and macroeconomic impact
The advisory council warns that total social contribution rates—now about 42.3 percent—could rise to 45.4 percent by 2030 and reach 49.7 percent around 2040 if no structural changes are made. That rise, the report says, would shave 0.5 to 0.9 percentage points off GDP growth to 2035 and reduce net incomes and employment levels. The authors stress the fiscal and growth trade‑offs of inaction as a central reason to pursue comprehensive GKV reform.
A new cohort‑based capital fund for long‑term care
On long‑term care, the Council goes further than current government proposals by recommending the creation of a “Pflegevorsorgefonds II,” a capital‑funded mechanism in which each birth cohort would save additional contributions for its future care needs. The panel argues this cohort‑specific capitalization would partially replace pure pay‑as‑you‑go financing and reduce the pressure on future contribution rates. It also criticizes the original Pflegevorsorgefonds for having been underfunded, exposed to political interference and delivering weak returns.
End of generalized care subsidies and redirected spending
The experts call for stopping further top‑ups to the existing reserve and redirecting available funds to current care needs, while abolishing untargeted performance surcharges and relief payments that they say account for substantial, inefficient spending. The report highlights that supplemental payments introduced in recent years amount to a significant share of care expenditure and in 2025 the subsidy for institutional resident co‑payments reached around €7.1 billion. The Council recommends replacing broad entitlements with targeted instruments such as a needs‑based care allowance and, in exceptional hardship cases, means‑tested social assistance.
Tighter eligibility thresholds to curb rising beneficiary numbers
The advisory board traces much of the surge in care recipients to expanded eligibility introduced by earlier reforms, notably the shift from three care levels to five grades and the recognition of cognitive impairments like dementia as grounds for full benefits. Since that expansion roughly a decade ago, the number of people classified as care‑dependent has climbed to nearly six million. The Council urges stricter thresholds for assigning care grades to reduce overextension of benefits and to lower average care intensity, arguing this change could complement capital‑funded savings to stabilize contribution levels.
Political and fiscal ripple effects for Berlin and households
Several recommendations align with elements of current ministerial drafts, including measures to limit free spousal co‑insurance and to promote hospital specialization and ambulatory care. The report also presses for clearer accounting of non‑insurance social commitments and urges that cross‑subsidies fulfilling broader societal goals be financed entirely from taxes. Implementation would pose politically sensitive choices for federal and state governments and could shift a larger share of care costs back onto older generations, the Council says, to avoid placing disproportionate burdens on younger workers.
The Council of Economic Experts frames these proposals as pragmatic responses to demographic and policy drivers that are already pushing contribution rates upward. Whether Berlin adopts any of the more radical measures — especially cohort‑based capitalization or civil‑servant inclusion — will depend on political negotiations in the months ahead and on how the government balances fiscal relief, equity and the stability of Germany’s statutory insurance systems.
