The long-term care insurance system is teetering on the edge of bankruptcy in Germany, with a looming financial crisis intensifying concerns. Despite a recent increase in contributions in 2023, which was intended to stabilize finances through the election period, the funds are falling short. The number of individuals requiring care is rising unexpectedly, and the cost of limiting out-of-pocket expenses for nursing home residents is significantly higher than anticipated.
To combat the crisis, proposed solutions include another contribution increase ranging from 0.25 to 0.3 percentage points, as well as grants from tax funds to reimburse pandemic-related costs. Additionally, relief for long-term care insurance from pension contributions for family caregivers and refinancing of medical treatment care are being considered. However, the implementation of these measures faces challenges. Cuts to social benefits during an election year are unlikely, and plans to increase care benefits by 4.5% from January 2025 are still expected to go ahead.
Further complicating the situation, a contribution increase in statutory health insurance by 0.7 percentage points is anticipated, marking the most significant rise in social contributions in over two decades. Federal Health Minister Karl Lauterbach has announced plans for another reform in the fall to address the escalating crisis.
Amidst these challenges, several federal states are advocating for a structural overhaul to ensure care remains affordable for affected individuals and families, while managing costs for regional governments and municipalities. As discussions about potential solutions unfold, the urgency to secure long-term care insurance's financial future remains critical.
