Cost-cutting measures loom

Health insurance fund on the brink of financial collapse

The ÖGK’s annual reports show that the health insurance fund’s reserves have been depleted.(Bild: Krone KREATIV/stock.adobe.com)

Just a few years ago, the Austrian Health Insurance Fund (ÖGK) still had a comfortable financial reserve, but today there is nothing left of it. Without far-reaching reforms and additional funding, measures are looming that will ultimately affect the insured as well.

Our healthcare system is ailing in every respect—and Austria’s largest social insurance provider is running out of money to plug its budget gaps. While the ÖGK still reported reserves of 1.4 billion in 2020, by the end of 2024 there were not even enough cash reserves left to cover the annual deficit. 25 million euros were reported as uncovered reserves. Nothing remains of the legally mandated benefit security reserve, which amounts to approximately one-twelfth of annual expenditures on insurance benefits.

The reason for this is several years of significant deficits. Since 2020, the fund has regularly posted losses in the hundreds of millions. In 2020, the deficit stood at around 551 million euros, and in 2021 it was as high as approximately 627 million euros. The balance sheet remained negative in the following years as well, albeit at slightly lower levels (2022: minus 301 million; 2023: minus 410 million; and 2024: minus 550 million).

And the ÖGK’s forecasts are no more promising: an annual deficit of 948 million euros is expected through 2028.

By 2028, the ÖGK expects an annual deficit of nearly one billion euros.(Bild: Christian Jauschowetz)

“Maintaining liquidity will be difficult due to demographic change,” warns health economist Ernest Pichlbauer. Although the health insurance fund repeatedly approves austerity measures, they are not enough. And even the increases in pension contributions are merely a drop in the bucket. “If things continue this way, the situation looks very bleak. The only option will be benefit cuts,” says Pichlbauer.

Minister: “No possibility for further subsidies”
SPÖ Health Minister Korinna Schumann, however, rules out further financial support from the state for 2027 and 2028: “From our perspective, there is currently no possibility of providing additional funds.”

Even though state budgets are equally strained, it will likely not be possible without state subsidies or benefit adjustments.

Florian Bachner, Gesundheitsökonom der Gesundheit Österreich GmbH

So what’s next? From a realpolitik perspective, an ÖGK bankruptcy is out of the question, says health economist Florian Bachner of Gesundheit Österreich GmbH: “Even though state budgets are equally strained, it will likely not be possible without state subsidies or service adjustments,” says Bachner, who also expects service cuts.

According to experts, the outlook for our healthcare system is bleak without major reforms and a new, sustainable financial structure. As Minister Schumann has reported on multiple occasions, discussions are currently underway in reform groups.

Where the billions in reserves have gone
The deficits of the Austrian Health Insurance Fund are primarily due to sharply rising expenditures in several major areas: Hospital financing accounts for the largest share, having grown by more than one billion euros since 2020. Fees for private practitioners have also risen significantly, as have medication costs, particularly due to expensive specialized therapies.

Sick pay has also seen particularly rapid growth, increasing by around 500 million euros since 2019—due in part to longer periods of sick leave and an increase in mental health conditions. Expenditures grew significantly faster than revenues from health insurance premiums.