The Bundestag on Friday approved the legislation with 378 votes, while 208 lawmakers said "no" to the changes to the public health care system. Thus, at least 40 parliamentarians from the ruling coalition parties, the Christian Union (CDU/CSU) and Social Democrats (SPD), rejected the reform.

Health Minister Ulla Schmidt said she was satisfied with the result.

"It's a good majority," she said on Friday.

The Bundesrat, Germany's upper chamber of parliament, will vote on the legislation on Feb. 16, and is also expected to approve it. The law will come into effect on April 1.

The reform's original aim was to cut non-labor wage costs, which contribute to the high price of German workers. However, public health insurance companies raised their premiums during the long months of discussion before the reform passed. Both employers and employees were forced to pay more, jacking up non-wage labor costs.

Lowest common denominator

Angela Merkel's CDU and its Bavarian sister party, the CSU, initially wanted to cap employers' contributions, which the Social Democrats opposed. Instead, the SPD wanted a broader segment of society to be required to contribute to the system of solidarity that covers nearly 90 percent of Germany's residents. The party demanded that civil servants, high earners and the self-employed also contribute to the public health insurance companies. Unlike the rest of society, those three groups are allowed to have private insurance plans, and most of them do.

Health Minister Schmidt, a Social Democrat, wanted private insurance to be available for everyone. Private insurers provide more services and allow more flexibility than the 252 public health insurance companies. But the CDU/CSU rejected Schmidt's plan. In the end, the governing coalition of conservatives and Social Democrats agreed on the lowest common denominator. Still, Merkel declared it a breakthrough.

"The measures aim to improve the quality of providers, increase the choice and decision-making chances of the people insured, and altogether ensure a clearer picture of economy, transparency, competition and the financial viability of the health care system," she said in July, when the coalition partners announced the compromise they had agreed upon.

The heart of the reform is the so-called "health fund." From 2009, all contributions to the public health insurance companies as well as state subsidies are supposed to be paid into this new fund. The companies will levy a standard premium for everyone, and if the money they are allocated from the health fund doesn't cover their costs, they will be able to charge the people they insure a supplement. Insurers who use their funds efficiently and don't demand more money of their clients will thus be more appealing to the public.

Lack of enthusiasm

Germany is the only country in the world that, in essence, has two separate health care systems -- the private and public systems. The reform will make it more difficult for people to be eligible for private insurance. They will only be allowed to switch from a public to a private insurance company if they earn 3,975 euros ($5,155) per month for three years.

The changes also require everyone in Germany to have health insurance by 2009. An estimated 200,000 residents aren't currently covered. In the future, people who fall ill and aren't insured will be obliged to pay back health insurance premiums for up to five years.

The overhaul hasn't provoked enthusiasm anywhere in Germany -- not from politicians, the insurance companies, health care professionals or patients. Up to the final days before the Bundestag voted on the measures, the insurance companies lobbied the government to reform the reform. They argued that the changes wouldn't resolve the public health care system's financial problems, patients would carry a greater burden than now, bureaucracy would be increased and competition limited.

"If this is a reform, then reform is a dirty word," said Reinhard Bütiköfer, head of the Green party opposition in the Bundestag. "It is the first so-called health care system reform in which it is a foregone conclusion that everything will be more expensive for the people who are insured."