Amid rising care needs and costs, the Federal Council is poised to vote on increasing contributions to long-term care insurance, with Health Minister Karl Lauterbach warning of potential fund insolvency. Despite this urgent measure, comprehensive reform of the care system remains unaddressed. As expenses soar, particularly for nursing home care, the financial burden on recipients intensifies. Future discussions include merging public and private insurance, and capping out-of-pocket expenses to alleviate the strain on those in need.
Increasing Care Needs and Rising Costs: Federal Council to Vote on Higher Contributions Today
In light of the growing number of individuals requiring care and escalating expenses, the Federal Council is set to make a crucial decision today regarding an increase in care contributions. Health Minister Karl Lauterbach has raised concerns that without this adjustment, certain care funds could face insolvency.
Just two days after a coalition breakdown, Minister Lauterbach steps into the spotlight, urgently addressing the situation. Initially, he had aimed to propose a 0.2 percentage point increase in long-term care insurance contributions through legislation. However, with the absence of the FDP, this plan is no longer feasible. Consequently, an emergency regulation is being put forth to address the pressing financial issues faced by struggling care funds. Lauterbach emphasizes the immediate necessity of this regulation, warning that failure to approve the increase could lead to insolvency for some care funds.
The prospect of people in need of care being left without financial support from their funds, along with nursing homes running out of resources, is a scenario no one wishes to confront. The Bundestag has already given the green light to the emergency measure, and today’s Federal Council decision is critical. It is hard to imagine that this regulation will not pass during the final session of the year. Florian Lanz from the National Association of Statutory Health Insurance Funds (GKV) expresses confidence, stating, “We expect the Federal Council to approve this increase.”
The Urgent Need for Comprehensive Care Reform
Despite today’s decision, the core issue remains unaddressed: the Ampel government has yet to initiate a comprehensive reform of the care system. Lauterbach describes the lack of progress as a “collateral damage of the coalition’s collapse.” Few anticipated that the Ampel government would successfully implement significant reforms, mainly because Lauterbach has diverted his focus to other pressing health policy matters. Experts agree that the incoming federal government will face a daunting challenge, with Lanz emphasizing that establishing a solid financial foundation for long-term care insurance will be a top priority in the coming year.
Since the inception of long-term care insurance nearly three decades ago, the number of individuals requiring care has surged drastically, leading to increased costs. Last year alone, 5.2 million people benefited from long-term care insurance—a figure that has quintupled since 1995. This trend can be partially attributed to the fact that the German population is living longer.
Additionally, a reform in 2017 expanded the definition of those eligible for care, allowing many dementia patients to receive support that they previously lacked. Consequently, the number of individuals needing care in Germany has risen by hundreds of thousands in recent years.
Rising Financial Burden on Care Recipients
Long-term care insurance is designed to assist individuals requiring help with daily activities, whether at home or in a care facility. The amount of support provided is contingent on the level of care needed; however, not all expenses are covered, leaving care recipients to shoulder the remaining costs.
The financial burden associated with nursing home care has escalated in recent years, with costs for meals, accommodations, and infrastructure investments typically not included in long-term care insurance coverage. Furthermore, care and support coverage is only partial, and increasing wages for nursing staff further exacerbate the financial strain on those in need of care. As a result, individuals currently face an average monthly co-payment of nearly €2,900 for nursing home placements in their first year.
The Ampel government aimed to alleviate this burden through a proposed law in 2023, which included increased allowances for inpatient care and additional financial support for at-home care starting in 2024. Social organizations, however, criticize these measures as insufficient, arguing they fail to keep pace with inflation.
With an aging population and rising care needs, care funds are being pushed to their limits, leading to unsustainable financial demands.
Growing Concern Over Care Funding
Experts largely agree that the recent mini-reform has proven ineffective in addressing the rising co-payments faced by care recipients. Care researcher Heinz Rothgang from the University of Bremen notes that the original intent of long-term care insurance—to prevent individuals from facing financial hardship due to care needs—no longer holds true, even as insurance contributions continue to rise.
Further aspects of the mini-reform are not set to take effect until 2025, which includes improved support for family caregivers. This initiative aims to bundle various services and increase resources to provide relief for relatives, allowing them to take necessary breaks. However, finding short-term care placements remains a challenge, as availability is already limited.
Despite higher allowances being introduced, the costs for care in facilities have continued to climb since January.
Lauterbach’s Vision for Future Reforms
Recognizing the urgent need for change, Health Minister Lauterbach acknowledges that the current situation is untenable. “Time is running out for us,” he states, expressing his desire to continue serving as Minister in the next legislative term. He warns that without substantial reforms, co-payments will soon become unaffordable.
In a recent discussion, Lauterbach proposed capping the co-payments for care recipients, but the Ampel coalition has struggled to reach an agreement—particularly regarding who should bear the increasing costs.
Rothgang emphasizes the necessity of increased funding for social long-term care insurance, suggesting that a blend of tax revenue and financial balancing with private long-term care insurance will be essential moving forward.
As care costs continue to rise, Health Minister Lauterbach is committed to finding solutions to this pressing issue.
Future Perspectives from Political Parties
Debate continues around the potential merger of statutory and private long-term care insurance, which would require all earners, regardless of income level, to contribute to a unified fund. The SPD, Greens, and Left parties have expressed support for this idea.
The SPD proposes capping the out-of-pocket expenses for care recipients in nursing homes at €1,000, although costs for accommodation and meals would still remain additional.
Both the Social Democrats and Greens are advocating for increased financial support for long-term care insurance, aiming to address the growing needs of the population effectively.