Anticipated Annual Red Ink for Long-Term Care Insurance
Health insurance providers are bracing for yet another round of financial losses this year, issuing alarms about escalating financial hazards. In the first quarter of 2024, a shortfall of 650 million Euro was reported, as per Gernot Kiefer, deputy CEO of the Statutory Health Insurance Funds Association, which also manages nursing homes, in a press conference held in Brandenburg, Germany on a Wednesday. The predicted total deficit for the entire year stands at 1.5 billion Euro, with an expected 3.4 billion Euro shortfall projected for 2025. This equates to an increase of 0.2 points in contributions.
The health insurance fund ended the preceding year with a surplus of 1.79 billion Euro. The extra income was attributed to a contribution hike effective July 1, 2023. The contribution for individuals without kids rose to 4 percent, while those with children saw their contribution increase to 3.4 percent. The employer contribution was also raised to 1.7 percent. Families with at least two children now pay less in employee contribution compared to before due to reforms. The traffic light coalition's policies, which offer relief to care-dependent individuals, are projected to generate an additional 6.6 billion Euro per year, initially meant to secure the funds until 2025.
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The anticipated annual deficit for long-term care insurance in 2024 is 1.5 billion Euro, as revealed by Gernot Kiefer. This figure is expected to increase significantly to a projected shortfall of 3.4 billion Euro in 2025. Despite the current surplus of 1.79 billion Euro reported at the end of the preceding year, the healthcare sector still faces long-term challenges in terms of long-term care insurance financing, with figures showing a potential gap of several billions of Euros.
