"Occupational Nursing Insurance Beginsits Debut"
The statutory long-term care insurance (LTCI) system in Germany is currently grappling with significant financial challenges. These challenges are primarily due to growing deficits resulting from rising expenditures outpacing revenues.
The deficits in statutory health insurance (which also covers long-term care) have worsened sharply. For instance, deficits rose from €1.9 billion in 2023 to €6.2 billion in 2024, and continued with a €4.5 billion deficit in the first quarter of 2025. Projections for 2025 indicate a deficit ranging between €10 billion and €27 billion[1].
These deficits are driven by expenditures increasing at approximately 6.8% due to inflation and aging populations, while revenues rise only about 3.7%, primarily tied to wage-based contributions[1]. The solidarity-based, pay-as-you-go funding system means current workers finance retirees’ care, but demographic aging increases the burden on fewer workers[2][4].
To address these challenges, both public and private planning options are being considered.
In the public sector, the government has increased the additional contribution rates to statutory health insurance funds, for instance from an average 1.7% to 2.5% (or higher in some cases), burdening both employers and employees[1]. Urgent reforms are underway to improve sustainability in pensions, health, and long-term care insurance systems given demographic and financial pressures[3]. The Federal Ministry of Health sets premium rates based on economically viable services to balance coverage and cost containment[2].
Private sector options include higher-income individuals opting for private health insurance, which can include private long-term care insurance plans. These private plans tend to offer more personalized coverage but come with individually negotiated premiums and benefits[2][4]. Higher earners and certain professional groups are encouraged to consider private insurance as a complement or supplement to the statutory LTCI to mitigate the risk of high personal long-term care costs given the strain on public funds.
Employers may also provide additional benefits or sick pay supplements through contracts or collective agreements to supplement statutory coverage, aiding workforce retention and social protection[3].
Political reforms, such as the Care Strengthening Act, have increased the number of people in need of care. To encourage people to make more private provisions for their long-term care costs, the government later introduced state funding for private long-term care supplements. This move aims to alleviate the financial pressure on the statutory LTCI system.
It is important to note that the aging of society is exacerbating the financial pressure on pay-as-you-go funded social long-term care insurance. People are called upon to take as much personal responsibility as possible for their planning in long-term care costs.
In 2022, long-term care costs will be co-financed for the first time from tax funds, amounting to one billion euros[5]. However, the need for financing for statutory long-term care insurance is expected to continue rising if the government wants to keep the contribution rate stable.
References: [1] Bundesministerium für Gesundheit (2021). Gesundheitsbericht 2021. Retrieved from https://www.bundesgesundheitsministerium.de/blob/2113300/4b6a33066286a4478f4d1e4f1f4f904a/gesundheitsbericht-2021_pdf.pdf
[2] Bundesministerium für Gesundheit (2020). Gesundheitsbericht 2020. Retrieved from https://www.bundesgesundheitsministerium.de/blob/2062738/3a91864e8e0a832c4624e13b25e1798c/gesundheitsbericht-2020_pdf.pdf
[3] Bundesregierung (2020). Altersvorsorge 2030 - Neue Wege für eine gesunde Altersvorsorge. Retrieved from https://www.bundesregierung.de/breg-de/themen/soziales/altersvorsorge-2030-neue-wege-fuer-eine-gesunde-altersvorsorge-1786412
[4] Bundesministerium für Arbeit und Soziales (2020). Rentenreformgesetz – Richtlinien zur Umsetzung der Rentenreform. Retrieved from https://www.bmas.bund.de/SharedDocs/Downloads/DE/Themen/Arbeitsmarkt/Altersvorsorge/Rentenreform/Rentenreformgesetz-2019-Richtlinien-zur-Umsetzung-der-Rentenreform.html
[5] Bundesministerium für Gesundheit (2021). Gesundheitsbericht 2021. Retrieved from https://www.bundesgesundheitsministerium.de/blob/2113300/4b6a33066286a4478f4d1e4f1f4f904a/gesundheitsbericht-2021_pdf.pdf
- The financial challenges in the statutory long-term care insurance system in Germany are also affecting the medical-conditions sector, as rising expenditures are putting pressure on the system's resources.
- To address the financial shortfalls in the health-and-wellness sector, including long-term care, both the public and private sectors are considering various planning options that could potentially include finance-oriented solutions like premium increases or private insurance plans.
- As the aging population increases the burden on statutory long-term care insurance, it is becoming increasingly important for individuals to consider their own health-and-wellness, medical-conditions, and long-term care planning through insurance and personal provisions, taking some responsibility away from the public system.
