The German statutory long-term care insurance system is facing significant financial challenges, with expenditures having exceeded revenues for an extended period. Without decisive measures, projections from the Federal Ministry of Health anticipate a funding shortfall of around EUR7.5 billion by 2027, which could rise to over EUR15 billion by 2028. Responding to these projections, the government is preparing a comprehensive reform package designed to stabilize the system's finances and prevent insolvency.

Key Proposals for Financial Relief

Central to the proposed reforms are adjustments intended to curb spending and generate additional revenue. One major element involves modifications to the graduated subsidies that help offset the personal contributions of residents in care facilities. Under the draft legislation, increases to these subsidies would take effect six months later than previously planned. This delayed implementation is expected to alleviate financial pressure on the insurance funds by approximately EUR2.6 billion in 2027.

Further, the reform suggests raising the contribution rate for childless insured individuals from 4.2% to 4.3% at the beginning of 2027. The contribution structure for non-working spouses is also set to change, with new restrictions modeled after those used in statutory health insurance. The income threshold for premium-free coverage of spouses would be increased, mainly affecting high-income households.

Adjustments to Benefits and Contributions

For the first time, the proposed legislation introduces a mechanism whereby the standard benefits provided by long-term care insurance would be adjusted annually in line with inflation, starting in 2028. This approach is intended to help moderate the increase in out-of-pocket costs for those requiring care.

Another measure focuses on individuals in the lowest care category, known as Care Level 1. The monthly flat-rate relief payment of up to EUR131 for this group is slated for removal, which would generate an estimated EUR400 million in savings for the system in 2027.

Emphasis on Prevention and Home Care Support

Alongside financial restructuring, the reform prioritizes prevention and rehabilitation. The objective is to delay the onset or progression of care dependency, thereby reducing long-term costs for the insurance system. To this end, a new entitlement to 'care guidance' at home is proposed. This service would help identify health deterioration at an earlier stage, allowing for timely interventions. Local municipalities would be empowered to offer care guidance, integrating these services with their existing support resources.

These changes are designed not only to improve financial sustainability but also to enhance the quality and timeliness of care for those living at home. The planned measures reflect a broader shift toward early intervention and preventative strategies within the care sector.

Broader Context: Additional Cost-Containment Initiatives

The nursing reform is part of a larger package of healthcare cost-containment measures introduced by the government. This includes expenditure controls affecting medical practices, hospitals, and pharmaceutical manufacturers. As part of these efforts, the discount that pharmacies must provide to statutory health insurers is set to increase from EUR1.77 to EUR2.07 per prescription, starting at the end of 2026. These initiatives collectively aim to prevent sharp increases in insurance premiums and to ensure the long-term stability of the German healthcare system.

The government's actions underscore the urgency of addressing rising healthcare costs while maintaining the accessibility and quality of care for insured individuals. The reform proposals are subject to further legislative review and debate before implementation.