Overview

• Germany’s statutory health, unemployment and pension insurance schemes collectively spend about €25 billion a year on administration, according to figures from the Employers’ Association.
• Health insurance accounts for €11 billion of these costs while unemployment and pension schemes each consume €5 billion.
• Administrative overhead ratios vary widely across the branches with unemployment insurance at roughly 14%, health insurance at 3.6% and pension insurance at about 1.2% of total expenditures.
• Rainer Dulger, president of the Employers’ Association, warns that convoluted structures and a fragmented network of 94 health insurers—down from 1,815 in 1970—are inflating bureaucracy.
• Experts estimate that trimming administrative expenses could lower contribution rates by around one percentage point and form a central focus of the government’s forthcoming reform commission.