Germany's long-term care insurance faces significant financial challenges, with insolvency looming as early as February. Reports indicate that a contribution increase of 0.25 to 0.3 percentage points is under discussion to avert bankruptcy and ensure financial stability until spring 2026. This potential rise comes alongside an anticipated 0.7 percentage point increase in health insurance contributions, marking the highest social contribution surge in over two decades.
Currently, the contribution rate stands at 3.4%, with childless individuals paying 4%, and families receiving deductions. The financial strain stems from increased care costs, a growing number of beneficiaries, and reforms that have provided relief to care recipients but also necessitated higher contributions. As the demographic landscape shifts, the pressure on the care system intensifies, prompting urgent discussions within the government.
Federal Health Minister Karl Lauterbach plans to introduce a financial stabilization concept to address these challenges. Despite the ministry's disagreement with insolvency reports, it acknowledges structural issues exacerbated by higher wages and an expanding pool of care dependents. The looming deficits are substantial, with predictions of a 1.5 billion euro shortfall in 2023 and a 3.4 billion euro deficit in 2024.
The proposed contribution hikes aim to cover these gaps, though they pose a significant burden on individuals, particularly those with fixed incomes like retirees. The government is exploring various solutions, including tax reliefs and shifting responsibilities between insurance sectors. However, the complex economic and demographic factors at play make finding a viable resolution imperative to prevent a systemic breakdown in care provision.
