Rising Care Costs: A Call for Fundamental Reforms in Long-Term Insurance

The financial burden of long-term care is escalating, leading to increased out-of-pocket expenses for those requiring assistance. Recent trends indicate that the personal contributions of individuals placed in care facilities are on a sharp rise, raising concerns about the sustainability of the current care insurance model.

When the long-term care insurance system was established three decades ago, its primary goal was to offer financial protection for those in need of care and to alleviate the financial strain on municipalities that previously bore the bulk of care expenses. Initially, this system met its objectives; however, over time, the value of care services has diminished due to a lack of adjustment to general cost increases. As a result, many individuals now face significantly higher personal financial contributions.

The situation has worsened considerably since the introduction of mandatory wage standards for nursing staff in September 2022, aimed at improving working conditions in the sector. Although this move was necessary for fostering a more supportive work environment, it has inadvertently driven up care costs, presenting a challenge for those relying on these services.

Current statistics reveal that the financial contributions required from individuals in care homes have reached an unacceptable level. A growing number of care recipients are finding it increasingly difficult to manage their expenses independently, with over a third now dependent on social welfare to cover their care costs. This trend raises serious questions about the viability of the long-term care insurance model, which increasingly resembles a form of state dependency rather than a reliable insurance solution.

To address these challenges, it is clear that a comprehensive overhaul of the care system is necessary. Relying on minor adjustments to contribution rates is no longer a feasible strategy. A more effective and sustainable approach would involve creating a universal care insurance scheme that includes public servants and high earners, ensuring a more equitable distribution of costs and benefits. Unlike health insurance, where private and public systems diverge significantly, the services offered under both public and private long-term care insurance are largely identical, making this reform a realistic possibility.

The current trajectory of care funding and service provision must be critically reassessed to ensure that individuals in need of care receive adequate support without excessive personal financial strain. As the demographic landscape shifts and the demand for care services continues to grow, the urgency for reforming the long-term care insurance system cannot be overstated.