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Next-generation sequencing (NGS) has revolutionized the field of rare disease diagnostics. Whole exome and whole genome sequencing are now routinely used for diagnostic purposes; however, the overall diagnosis rate remains lower than expected. In this work, we review current approaches used for calling and interpretation of germline genetic variants in the human genome, and discuss the most important challenges that persist in the bioinformatic analysis of NGS data in medical genetics. We describe and attempt to quantitatively assess the remaining problems, such as the quality of the reference genome sequence, reproducible coverage biases, or variant calling accuracy in complex regions of the genome. We also discuss the prospects of switching to the complete human genome assembly or the human pan-genome and important caveats associated with such a switch. We touch on arguably the hardest problem of NGS data analysis for medical genomics, namely, the annotation of genetic variants and their subsequent interpretation. We highlight the most challenging aspects of annotation and prioritization of both coding and non-coding variants. Finally, we demonstrate the persistent prevalence of pathogenic variants in the coding genome, and outline research directions that may enhance the efficiency of NGS-based disease diagnostics. [ABSTRACT FROM AUTHOR]