Following months of political wrangling, Germany’s coalition government has finally united on plans for health care reform, unveiling highly controversial proposals to increase the fiscal burden on both individuals and employers.

Determined to bring the costs of statutory health care insurance back into equilibrium and to avoid a looming deficit of around EUR11bn for 2011, Germany’s coalition government has confirmed plans to increase the contributions rate for legal health insurance from 14.9% to 15.5% over the course of the coming year. Both employers and employees will be required to share the increase equally.

In addition, health insurance companies will have free rein in future to increase additional contributions for their members, as the government intends to remove the existing cap of 1% of gross income. However, in order to prevent individuals from being overburdened by the changes, the government aims to include a clause providing that should the amount exceed 2% of income, the excess will be paid using government tax revenue. The Federal Insurance Office has calculated that up until 2014, additional contributions will not exceed an average of EUR16 a month. » More: Health Care Reform in Germany