"Red alert": as early as October, Germany's long-term care insurance could run out of the money it needs to reimburse all benefits in full. In drastic terms, the National Association of Statutory Health and Long-Term Care Insurance Funds (GKV-Spitzenverband) tried on Monday to jolt politicians into action and to press for effective reforms. Federal Health Minister Carsten Linnemann (CDU) intends to bring his draft before the cabinet in September. Given the scale of the problems, the process could prove painful for everyone involved.
Spending on care is now rising almost three times faster than income, said GKV chief executive Oliver Blatt. "In October, revenue will no longer be enough to fully finance care benefits." By the end of the year, an estimated further €500 million would then be missing. That would bring the remaining deficit for this year to €1.2 billion, after the federal government had already injected €3.2 billion.
The bottom line for this year is therefore a deficit of €4.4 billion. For 2027, the GKV-Spitzenverband forecasts an as-yet uncovered funding requirement of €10 billion.
"If politicians do not change course soon, we will have a glaring problem," the GKV chief warned, though he added that people in need of care should have "no worries" about a collapse of the care insurance system: "Care cannot go bankrupt." "In the direst emergency," the Federal Office for Social Security (BAS) would have to step in and "pump money" into the equalisation fund for long-term care.
According to Blatt, the "main driver" of the financial problems is the sharply rising number of people drawing on care services. Their number has already grown by 6.5 percent, or 370,000 people, this year alone, the GKV chief said. Since 2017, the total number of people in need of care has therefore doubled from three million to almost six million. Further factors are wage increases in the care sector and higher costs for short-term and respite care.
To stabilise the care insurance system in the short term, Blatt called on the federal government to repay the €5.2 billion in debts incurred during the coronavirus period and to take over pension contributions for family members providing care. That, he said, would deliver annual relief of €5.3 billion.
The federal states must also meet their obligation to cover investment costs for care homes. These costs, too, are a reason why people in need of care now have to pay a personal contribution of "well over €3,000 a month in the first year of residence, on a national average."
The German Trade Union Confederation (DGB) voiced concern: "The federal government must do everything in its power to prevent the looming insolvency of the long-term care insurance system," demanded executive board member Anja Piel. She sees the ultimate way out in a comprehensive care insurance scheme "into which all citizens pay."
Like the Greens and the Left Party, the DGB also backed the GKV's demand that the federal government repay the coronavirus debts and take over pension payments for family carers. With that roughly €10 billion, the financial situation would be "stabilised until the end of 2027," said Left Party parliamentary group leader Sören Pellmann. That would give Linnemann time for a reform that spreads the burden "onto broader shoulders and also includes high earners and the privately insured."
Under current plans, Linnemann's care reform is due to take effect on 1 January 2027. A spokesperson for the Federal Ministry of Health said the cabinet was still scheduled to deal with the reform plans in September.
Looking ahead to a medium-term reform, GKV chief Blatt called for the criteria governing access to care benefits to be re-examined as well, arguing that politicians had designed them "considerably more generously" in a 2017 reform than experts had recommended. Blatt conceded that policymakers face "uncomfortable decisions" here, including for people in need of care and for care staff. If nothing is done, however, there will be "rising contribution rates at the expense of all contributors."
To stabilise care over the long term, the focus must be placed more firmly on prevention, Blatt continued. Digitalisation must also be pursued far more consistently in order to relieve the burden on care workers.
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