Urgent Financial Crisis Looms for Long-Term Care Insurance

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.