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The core of the Federal Government’s reform of the Social Security system in Germany is the so called Healthfund. It is supposed to give both coalition parties – when embedded in a different political matrix in the future – the possibility to continue developing their respective social policy projects: either a single, nation-wide public insurance (Social Democrats/SPD) or a bonus-based model (Christian Democrats/CDU). However, in the eyes of our author, the Healthfund does not solve existing problems, but it creates new ones.
With the introduction of the Healthfund, one central element of competition – the cost of the insurance – is eliminated and being replaced by a state-controlled price regulation. Yet, a single rate for health insurance set by the Federal Government prevents the management of any insurance company to act on the basis of economically rational thinking. This increases the pressure for scaling services down and, at the same time, will lead to a call for further injections covered by the taxpayer.
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