(de-news.net) – Germany’s governing coalition is seeking to resolve its remaining differences over long-term care reform before the package reaches the Federal Cabinet. The main point of contention is how to close the system’s widening funding gap while deciding whether reform should prioritize spending cuts, targeted benefit adjustments, or structural changes. The SPD, Greens, VdK and Verdi are calling for stronger protection of beneficiaries and caregivers, while economist Monika Schnitzer argues that short-term federal funding would need to be accompanied by significant benefit changes.
According to media reports, senior coalition officials met in Berlin to resolve the remaining disagreements before the long-term care reform is scheduled to go before the Federal Cabinet on Wednesday. Health Minister Carsten Linnemann, Chancellor Friedrich Merz, Chancellery chief Karin Warken and representatives of the Finance Ministry were reportedly involved in the talks, underscoring the continued effort to reconcile financial and policy differences within the governing coalition.
Linnemann has ruled out imposing additional burdens on Germany’s approximately 4 million family caregivers and has characterized the unresolved questions primarily as financial. The coalition is therefore seeking ways to offset or contain the associated expenses rather than shifting additional costs onto caregivers. At the same time, senior SPD lawmakers have emphasized that the reform should not be built around higher costs for beneficiaries or reductions in existing benefits.
The SPD argues that structural changes should take precedence over straightforward spending cuts. Its proposals include a cap on some nursing-home copayments and greater financial participation by private insurers, with the objective of changing the financing structure rather than simply reducing expenditure. SPD health policy spokesman Arif Pantazis has presented the approach as an issue of fairness, while CDU parliamentary deputy Stephan Stegemann has countered that the SPD is not making a sufficient contribution to resolving the underlying problems.
SPD parliamentary deputy Dagmar Schmidt, on her part, has supported the objective of bringing the reform to the cabinet this week, while maintaining that the package should amount to a fundamental restructuring rather than a narrow exercise in reducing benefits. She has also advocated a more equitable financial relationship between statutory and private long-term care insurance. This could involve cross-system financial equalization or, more fundamentally, the creation of a common system.
Mounting care deficit raises stakes of Wednesday cabinet decision
Meanwhile, Dennis Radtke, chairman of the CDU’s labor wing, the CDA, has likewise cautioned against turning the reform package primarily into a cost-cutting measure. He has argued that earlier health reforms were not sufficiently ambitious and has called instead for structural changes and closer scrutiny of services that do not directly correspond to the core function of long-term care insurance. His position reflects a broader debate within the coalition over whether the immediate financing problem can be addressed without postponing more fundamental changes.
The VdK social association has welcomed two elements of the proposed package in particular: the planned repayment of 5.2 billion euros in pandemic-related expenses and the commitment not to reduce pension contributions made on behalf of family caregivers. The association has emphasized that the reform should primarily improve conditions for the 5.7 million people receiving care at home, as well as for the relatives who provide or support that care. Its position places the immediate needs of care recipients and their families at the center of the reform debate.
At the same time, the Verdi trade union is seeking changes to the proposals, particularly opposing the planned suspension of the collective-wage requirement in elder care. The union argues that collectively negotiated compensation has helped make care work more attractive while supporting the long-term provision of services for people requiring care. Verdi also favors substantially reducing nursing-home copayments and establishing financial equalization between statutory and private insurance as an initial step toward universal coverage.
The Greens are calling for a rapid agreement within the coalition and are demanding that Finance Minister Lars Klingbeil (SPD) reimburse the long-term care insurance system for pandemic-related expenses. In their view, the repayment is necessary to prevent additional financial pressure on the system. The party also supports financial equalization between statutory and private long-term care insurance and a cap on care-related expenses, while ultimately advocating a universal long-term care insurance system.
Schnitzer urges structural overhaul as long-term care costs rise
Monika Schnitzer, chair of the German Council of Economic Experts, has taken a different view of the short-term financing challenge, arguing that federal funding would have to be accompanied by significant benefit reductions to stabilize long-term care insurance in the near term. She has said that the projected increase in contribution rates for 2027 could temporarily be moderated if the Federal Government assumed approximately 6 billion euros in unpaid pandemic-related costs. Such a move, however, would create a corresponding funding gap elsewhere in the federal budget. Schnitzer has argued that measures involving private insurance or civil-service benefits would require a much broader restructuring of the system and therefore could not provide an immediate solution. Schnitzer has also rejected a general cap on nursing-home copayments as insufficiently targeted.
In Schnitzer’s assessment, such a measure would distribute the additional costs among all contributors, including people with lower incomes, even though not everyone receiving the subsidy would necessarily require the same level of support. She therefore favors directing assistance more specifically toward those in need rather than applying a uniform benefit. Her statement is based on what she describes as a structural financing imbalance within the long-term care insurance system. Expenditures are rising faster than contribution-based income, while demographic aging is expected to intensify the pressure over time. Against that backdrop, Schnitzer has called for a structural review of benefits, including tighter eligibility requirements consistent with expert recommendations. She has also proposed examining broadly accessible programs such as the relief allowance and the nursing-home benefit supplement, including whether their current design remains financially sustainable.
The statutory long-term care insurance system is already facing a substantial funding shortfall. Without additional financing, the system could face a risk of insolvency as early as October, according to the umbrella organization representing statutory health and long-term care insurers. Current projections put the deficit at 4.4 billion euros for 2026, with the funding gap potentially widening to 10 billion euros in 2027. The figures have added urgency to the coalition’s effort to settle the financing dispute before the reform reaches the cabinet.
Linnemann’s draft includes stricter requirements for assigning individuals to a care grade, while a commission is expected to examine broader structural changes beginning in October. The health minister intends to present the legislation to the Federal Cabinet on Wednesday, making the upcoming meeting a key step in determining whether the coalition can reconcile its competing approaches to financing, benefits and structural reform.
