Germany's long-term care insurance nears collapse under €22.5B debt crisis
Germany’s long-term care insurance system is under severe strain. After 31 years as a key part of social security, it now faces its biggest crisis yet. Rising costs and unpaid debts have pushed the fund to the brink.
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 has failed to cover two major expenses: €5 billion in unpaid COVID-19 debts and another €5 billion in pension contributions for family caregivers.
On top of this, the federal states have not covered investment costs in nursing homes. If they did, residents could save around €500 each month. Health Minister Nina Warken (CDU) has warned that the system only covers part of long-term care costs and cannot sustain the full burden. She projects a combined deficit of €22.5 billion for 2027 and 2028. In response, Warken plans to present a draft law for care reform by mid-May. The proposal aims to address the growing financial gap and stabilise the system.
The total unpaid amount from the federal government this year alone reaches around €10 billion. Without urgent reform, the long-term care insurance system risks further instability. The upcoming draft law will determine how the government plans to tackle the crisis.
