2024-10-07 23:55:09
Finance
Health

Urgent Financial Crisis Looms for Long-Term Care Insurance

Image used under license from Shutterstock.com

Germany's long-term care insurance faces a severe financial crisis, potentially becoming insolvent by February without intervention. The current financial situation is worse than publicly acknowledged, with government predictions necessitating a contribution rate increase of 0.25 to 0.3 percentage points, surpassing the previously forecasted 0.2 points. Currently, the general contribution rate stands at 3.4%, with adjustments for different family situations. This looming deficit, expected to reach 3.4 billion euros by 2025, is exacerbated by rising numbers of care recipients and economic strains.

A comprehensive reform is urgently needed to stabilize financing. Health Minister Karl Lauterbach plans a significant reform, although specifics remain vague amid political disagreements. The reform aims to secure care provision for beneficiaries and ensure financial sustainability. Critics argue that the government must first address past financial obligations, such as pandemic-related costs, before implementing new measures. Meanwhile, the potential increase in both care and health insurance contributions could lead to the highest rise in social contributions in over two decades. The urgency of resolving these issues is critical to prevent insolvency and maintain essential services.

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The statutory long-term care insurance threatens to become insolvent in February 2023. According to a report by the Redaktionsnetzwerk Deutschland (RND), the federal government and the traffic light coalition are planning to increase the contribution rate by 0.25 to 0.3 percentage points to secure financing until the 2025 federal election. The general contribution rate is currently 3.4 percent, childless persons pay 4 percent, and families with more than one child under 25 years of age receive..
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Long-term care insurance is under pressure: Rising costs, high deficits and impending premium rate hikes. A "major reform" is planned, which is intended to regulate financing, contributions and co-payments in inpatient care. Details on possible premium rate increases have not yet been announced.
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