Germany's long-term care insurance faces €10 billion crisis amid reform urgency

Germany’s long-term care insurance system is under severe strain. After 31 years in operation, it now faces its biggest financial crisis yet. Rising costs and unpaid government debts have pushed the scheme to breaking point. The care insurance fund is spending far more than it receives. Residents’ personal contributions have already reached their maximum, leaving no room for further increases. Meanwhile, the federal government owes the system €5 billion in unpaid COVID-19 debts and another €5 billion for unpaid pension contributions for family caregivers. Together, these unmet payments total around €10 billion this year.

Health Minister Nina Warken (CDU) has warned that the insurance only provides 'partial coverage' and cannot fully fund long-term care. She plans to propose a draft law for reform by mid-May. Without changes, the system could see a combined deficit of €22.5 billion in 2027 and 2028.

Adding to the pressure, federal states have not covered investment costs in nursing homes. If they did, residents’ monthly out-of-pocket expenses could drop by an average of €500. The financial burden on both the system and individuals continues to grow. The long-term care insurance system remains a key part of Germany’s social security. But its future depends on urgent reforms to restore financial stability and affordability. Without action, the gap between costs and funding will only widen.