Germany's long-term care insurance system is grappling with significant challenges, primarily due to an increasing number of individuals requiring care and a shortage of caregivers. The system is structured such that both employers and employees contribute to the care insurance through a shared percentage of the gross salary, with additional contributions from childless individuals. However, as the number of care recipients has nearly doubled over the past decade, the financial strain on the system has intensified. By 2023, the system's expenditures surged to over 59 billion euros, far outpacing its income, resulting in substantial deficits.
Projections indicate that the number of people needing care will continue to rise, potentially reaching 7.6 million by 2055. This demographic shift, coupled with the 2017 reform that expanded the definition of who qualifies for care assistance, has put additional pressure on resources. The anticipated shortage of up to 500,000 caregivers by 2034 compounds the problem, despite recent increases in caregiver wages.
In response, the German government plans to stabilize the system with substantial loans, amounting to 0.5 billion euros in 2025 and 1.5 billion euros in 2026. Despite these efforts, a long-term solution remains necessary, as deficits are projected to grow significantly, potentially reaching 12.3 billion euros by 2029. A federal-state commission has been established to devise a comprehensive reform, aiming to ensure the sustainability of the system. However, various stakeholders, including healthcare associations and political parties, emphasize the need for structural reforms, with suggestions ranging from reducing bureaucracy to establishing a full insurance model that covers all care costs.
