German States Threaten to Block Healthcare Overhaul as Pension Hike Gets Green Light
13.06.2026 - 09:53:59 | boerse-global.de
The Bundesrat, Germany’s upper house of parliament, approved a 4.24 percent pension increase for 21 million retirees on Friday, but the same session exposed deepening tensions over a planned healthcare reform that states warn could accelerate hospital closures. The pension adjustment, effective July 1, lifts a standard monthly payment after 45 contribution years by roughly €78 — the biggest percentage rise in years.
Behind the scenes, a political standoff is brewing. In a 64-page statement released Friday, state governments formally warned that the proposed Stabilisation Act for statutory health insurance (GKV) would worsen an already fragile hospital landscape. While the draft law aims to relieve insurers by €16.3 billion, states argue facilities are already shouldering €1.8 billion in costs, and many may not survive additional strain. Bundesratspräsident Andreas Bovenschulte said he expects the mediation committee to be convened unless the federal government offers concessions on what he called “non-insurance-related benefits.” Opposition lawmakers in the Bundestag described the plan on Thursday as “cuts to the welfare state.”
Meanwhile, the pandemic’s long shadow continues to shape policy. A parliamentary Enquete-Commission held a public hearing on Thursday examining how COVID-19 affected working life and social safety nets, with a particular focus on the burden placed on care workers. Its final report, including recommendations, is scheduled for the end of June 2027.
A day earlier, Chancellor Friedrich Merz held a top-level meeting with representatives from business associations and trade unions. The discussion, which both sides called constructive, centred on more flexible working hours and keeping ancillary wage costs stable. The coalition committee is set to meet on July 1 to hammer out concrete decisions on labour, social and tax reforms. The German Chamber of Industry and Commerce (DIHK) expressed confidence that major parts of the package could pass before the parliamentary summer break begins in mid-July.
The Bundesrat also cleared a series of other measures on Friday. Under a new pharmacy reform, pharmacists will be allowed to administer vaccinations, draw blood and, in exceptional cases, dispense prescription-only medications without a doctor’s order. Nationwide use of electronic ankle monitors for domestic violence cases has also been authorised. Additionally, a reduction in the air transport tax was passed.
The next regular session of the Bundesrat is scheduled for July 10.
