Anticipated Long-Term Care Insurance Shortfall Reaches Billions
Over 5.3 million folks are receiving benefits from the statutory health insurance for nursing care, with an additional 300,000 joining each year. The current funding system through contributions isn't enough to meet the demand, prompting calls for fundamental reform. A mere increase in contributions won't cut it.
The nursing care insurance is forecasting red figures yet again this year and is warning of growing financial risks. In the initial months of the year, a deficit of 650 million Euro was documented, according to Gernot Kiefer, Deputy Chairman of the Association of Statutory Health Insurance Funds, which also represents the nursing care funds, in Brandenburg, Kremmen. For the whole year, a deficit of 1.5 billion Euro is anticipated, and 3.4 billion Euro is expected in the following year. This translates to a contribution increase of 0.2 percentage points.
Shortly after political stabilization action, new issues are looming. In the previous year, the nursing care insurance recorded a surplus of nearly 1.8 billion Euro - this was due to higher revenues from a reform of the traffic light coalition with a contribution increase in July. For individuals without children, the contribution rose to 4 percent, and for contributory payers with a child to 3.4 percent. Families with at least two children now pay less in terms of the employee's share than before. The reform, which also offers relief for care-dependent individuals, was supposed to secure the finances at least until 2025.
Reserves may fall short
Kiefer stated that the financial pressure is already significant in the current fiscal year, so that the nursing care funds must secure their liquidity with certain instruments. At the start of the coming year, the balance should then be below the statutory requirement for reserves. To secure the liquidity, additional funds are necessary from January 2025. The reason for the development are more benefit recipients and upcoming further relief for care-dependent individuals.
Kiefer explained that several trends are coming together that are making the financial situation more challenging. The need for care and the number of affected individuals are increasing. By the end of 2023, there were reportedly more than five million benefit recipients for the first time, namely 5.24 million. Since 2017, an average of 320,000 have joined annually. In the previous year, there were even 360,000 new additions. At the same time, the expansion of the care offer cannot keep pace with the increasing number of care-dependent individuals.
Patient advocates demand federal assistance
"The system is tottering," said Kiefer. "Urgent consensus is needed to secure the future of care and a fundamental financial reform. Turning the contribution knob is not a sustainable solution. In the meantime, introduced subsidies for nursing home residents to ease self-paying parts cost the nursing care funds 4.5 billion Euro in 2023. However, they are not precise, as all income groups benefit equally from them."
The German Patient Protection Foundation criticized that the latest nursing reform of Health Minister Karl Lauterbach is no more than a facelift. Therefore, a federally funded subsidy is overdue. Chancellor Olaf Scholz recently made it clear that a nursing reform is to be tackled, which also involves financing and contribution levels.
GKV board member Kiefer expressed skepticism about whether a major reform can still be implemented before the Bundestag election in 2025. In the new legislative period, it should, however, be "at the very top of the agenda".
Read also:
- To address the financial challenges in the nursing care system, there have been calls for a fundamental overhaul of the current social policy, focusing on the reform of social systems and statutory health insurance companies.
- Long-term care insurance companies are grappling with rising costs for care, driven by an increase in the number of benefit recipients and the need for long-term care.
- In light of the financial pressures, some patient advocates are pushing for federal assistance and subsidies, as a mere increase in contributions or tweaks in the existing system may not be sufficient to sustain the long-term care system.
