Health insurance companies expect billion additional costs through coalition agreement

Due to the decisions of the Union and the SPD for the health sector, the health insurance companies are facing considerable additional costs.

Cash registers and other industry experts assume that the costs will be around two billion euros per year by 2021. A Reuters list of health insurances shows that alone in the hospital sector should be incurred around one billion euros. For example, the planned continuation of the Structural Funds, which is intended to finance restructuring in the hospital sector, would cost statutory health insurance (SHI) € 500 million a year. A hygiene promotion program cost 75 million euros, the full collective financing with 400 million euros.

The higher fixed subsidies for dentures should cost according to the calculations, 330 million euros. In addition, the health insurances have to pay for the planned 8,000 additional skilled workers in care facilities for medical treatment, which amounts to 400 million euros per year. All in all, this amounts to around 1.6 to 1.7 billion euros.

It is difficult to quantify many other issues, such as the planned improvements in outpatient care, for example by increasing the Structural Funds to support medical professionals in rural areas, so that around € 2 billion is considered realistic in the counties.

Other industry experts also assume that the additional costs for the next four years will average just under two billion euros per year – ie below this level and at the end of the legislative term. Also in the social care insurance is expected in the circles that by 2021, the additional costs increase to up to one billion euros.

According to a rule of thumb, about 1.1 billion euros make up 0.1 contribution points. There is therefore a high likelihood that contributions will have to rise as a result of the reforms. However, this also depends on the concrete design of the measures and on whether the funds save money in other ways, for example with so-called voluntary statutory benefits.

The Union and SPD have also decided to return to full parity financing of health insurance contributions by employees and employers. This refers to the additional contribution that is currently borne by the employees alone and on average amounts to one percent of the gross income. For those insured by the law, this will make it cheaper, which would have to be offset in the case of premium increases.

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Welfare and woe of the Dax depends on the interest – bumpy price development

To old heights? Or just a break on the way to new lows? The opinions in the market about the upcoming stock exchange week are different. With a rise in the Dax (DAX) of around 300 points last week, the stabilization can be seen, the index had plummeted in the three weeks before by almost 1,500 points. This has been the hottest retreat for two years.

“After the stock markets have been shaken up a bit in the weeks before, investors dared to buy again”, Claudia Windt from Helaba summarizes the mixed situation. The analyst, however, does not believe in an end to the price losses. Their trigger was inflationary concerns and tendencies of overheating in the US economy. However, these real warning signals would be “swept aside and even interpreted as expressing a strong economy”.

On Wednesday, investors are likely to watch the US Federal Reserve’s assessment of the current situation. After all, the Fed is the first of the major central banks that has embarked on a somewhat more restrictive course of monetary policy. On the capital markets, slightly more than three rate hikes are currently priced into the US this year, BayernLB notes. “The consensus of the economists expects a total of four interest rate cuts this year”.

However, rising interest rates could spoil the party on the stock markets. Because bonds gain in attractiveness with higher returns in relation to shares. Increasing market interest rates also make the financing of companies more expensive, which in turn depresses their profitability. “Higher interest rate expectations seem to frighten investors,” says strategist Craig Erlam of broker Oanda.

The aim of the central banks must be “gallant” to emerge from the policy of low interest rates, without “plunging the bond markets into chaos,” wrote market expert Daniel Saurenz of Feingold Research. Above all, the Fed faces the most difficult task for many years. Their decisions influenced real estate just as much as stocks and bonds. “Almost everything depends on the interest rate”.

Strategist Albert Edwards from the French rule bank Societe Generale (PA: SOGN) throws in a market comment the question on what level should the yield on ten-year US bonds to rise to put the stock markets under pressure – and answered them himself: “About 2 ’85 percent seem to be enough to dump stocks’. The rise in US bonds above this level triggered the sell-off on the stock markets at the beginning of the month.

The reason for this is above all the strategist’s “grotesque timing of the tax incentives of US President Trump”. In a period of already rising interest rates, sharply rising US debt will increase pressure on the Fed to tighten interest rates even faster. However, this could even lead to a collapse in the financial markets in the US, warned Edwards, who has been one of the critical observers of central bank monetary policy for years.

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US housing at the beginning of the year on the rise

Housing construction in the USA starts with a tailwind in the year.

In January, the number of new construction started increased by 9.7 percent to an annual rate of 1.32 million, as the Commerce Department announced on Friday in Washington. This is the highest level since October 2016. Economists interviewed by Reuters had only expected a value of 1.23 million.

In particular, the construction of single-family homes, which accounts for a large part of the market, rose sharply – by 3.7 percent. Building permits for the sector as a whole increased by 7.4 percent to an annual rate of 1.39 million, the highest level since June 2007.

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