(de-news.net) – Germany’s planned long-term care reform is facing mounting financial pressure and significant disagreement within the governing coalition. Federal Health Minister Carsten Linnemann (CDU) is seeking the Federal Cabinet’s approval for measures aimed at stabilizing care insurance finances, but the coalition deputy partner SPD is pressing for broader structural reforms, including a cap on residential care costs and a fairer balance between statutory and private insurance. The debate also involves greater federal participation in municipal care costs, possible use of personal assets, and concerns over access to benefits, staffing costs and caregiver support. With the system facing a projected 4.4 billion euro deficit this year and potentially 10 billion euros in 2027, the central dispute concerns how the financial burden should be distributed among governments, insurers, individuals, caregivers and care recipients.
With the immediate objective of stabilizing the finances of the long-term care insurance system, Minister Linnemann intends to present his proposed care reform to the Cabinet for approval tomorrow. The legislation would raise the thresholds for obtaining a formal care classification, while broader structural changes to long-term care are scheduled to be considered by a commission beginning in October. The government’s immediate focus is therefore on financial stabilization, with longer-term structural questions to be addressed separately.
The financial pressure underlying the reform has continued to intensify. According to the umbrella organization representing statutory health and long-term care insurers, the care insurance system could face insolvency as early as October without additional government funding. A deficit of 4.4 billion euros is expected this year, with the financing gap potentially widening to 10 billion euros in 2027. These projections have added urgency to negotiations within the governing coalition while also highlighting the scale of the financial challenge confronting the proposed legislation.
Klingbeil (SPD) hopeful coalition deal can be reached
The proposed reform has also exposed significant disagreements within the ruling coalition. North Rhine-Westphalia Health Minister Karl-Josef Laumann (CDU) has questioned the SPD’s demands for changes, arguing that additional benefits would require funding that is not currently available. Rather than presenting the legislation as a comprehensive restructuring of long-term care, Laumann has largely characterized it as a cost-saving measure intended to prevent further increases in care-insurance contributions.
Although Linnemann remains committed to presenting the legislation to the Cabinet on schedule, the parameters of a possible compromise between the CDU/CSU and SPD remain uncertain. Senior coalition representatives met in Berlin in an effort to resolve the outstanding differences. According to media reports, Chancellor Friedrich Merz, Chancellery chief Miriam Warken, Linnemann and representatives of the Finance Ministry took part in the discussions. Linnemann has said that the remaining disagreements concern final financing questions, while the specific substance of the meeting has not been made public. Linnemann has also sought to reassure the roughly four million family members who provide care that they will not face additional burdens as a result of the changes. The government is now working to identify the corresponding financing arrangements. At the same time, senior SPD figures have argued that the response cannot depend primarily on reducing benefits or increasing costs for individuals. Their position is that the underlying structures of the care system must instead be addressed through broader reforms.
Saxony Minister President Michael Kretschmer (CDU) has called for greater federal participation in the care-related expenses borne by municipalities. He argues that the federal government should assume responsibility for the so-called assistance with care, a form of support that cost municipalities 6 billion euros in 2025. In Kretschmer’s view, because these costs are associated with a federal benefits law, the federal government should also assume a substantial share of the resulting financial burden. His proposal would explicitly incorporate federal participation into the care reform. Kretschmer also wants the principle of “help toward self-help” to become a guiding concept of the reform. Under such an approach, personal assets could, in certain circumstances, be used to help finance long-term care. The proposal reflects a broader discussion over how responsibility should be divided between individuals and the solidarity-based system, particularly when determining which care costs should be borne privately and which should be covered collectively.
SPD pushes for structural overhaul, changes in care financing
Finance Minister Lars Klingbeil (SPD) has meanwhile pushed for a swift agreement within the coalition while emphasizing that the legislation cannot become a purely austerity-oriented package. He has maintained that reforms to long-term care are necessary and that the coalition should continue working toward them with urgency. At the same time, the SPD is seeking a financial balancing mechanism between statutory and privately financed long-term care insurance, which Klingbeil regards as an important element of the negotiations.
Significant changes have also been demanded by SPD parliamentary leaders at the federal, state, and European levels. Their position calls either for a unified solidarity-based system or, at minimum, for a fairer financial distribution of costs between statutory and private care insurance. The SPD argues that people who have worked throughout their lives and paid contributions should be able to rely on adequate care if they later become dependent on assistance. A proposed cap on care costs is intended to limit the financial burden on those requiring residential care and their families.
Matthias Miersch, chairman of the SPD parliamentary group in the Bundestag, has argued that the government’s proposed approach does not adequately address the structural problems facing the care system. In the SPD’s view, the financial burden should be distributed more equitably because private care insurance has a structurally more favorable insured population than the statutory system. The party has therefore rejected an approach focused primarily on closing the immediate funding gap by transferring additional costs to individuals or municipalities.
SPD parliamentary leader Jochen Ott of North Rhine-Westphalia has likewise called for a fundamental reassessment of how long-term care is financed. He has pointed to earlier comments by Chancellor Merz concerning greater participation by private care insurance, arguing that the issue should therefore be considered as part of a broader debate over fairness in the system. Alongside a proposed cap on residents’ care costs, Ott has advocated a risk-adjustment mechanism between private and statutory insurers that, in his estimation, could mobilize approximately 3 billion euros. Ott has also criticized the government’s existing proposals as insufficiently structural, arguing that the measures currently under consideration amount to too little to constitute a comprehensive reform. In his view, simply reducing expenditures would not resolve the underlying problems of the system. He has additionally warned that rising individual costs could make residential care unaffordable for many older people, including those who receive a pension and may have supplementary occupational retirement income.
Care Organizations challenge reform plans over costs, benefits and workforce
Katja Kipping, managing director of the Paritätischer Gesamtverband, has advocated a fundamental restructuring of the system, including the eventual introduction of comprehensive long-term care insurance covering all costs. While acknowledging that such a model would not provide an immediate answer to the current financing crisis, she argues that without a more comprehensive approach, policymakers will remain caught in a cycle of short-term measures and difficult trade-offs. Kipping has also criticized rising out-of-pocket costs and expressed concern that limitations on staffing expenditures could weaken efforts to attract younger people to the profession, potentially aggravating future staffing shortages.
The Social Association VdK has welcomed the government’s assurances concerning family caregivers, particularly the commitment that pension-insurance contributions paid on behalf of people providing family care will not be reduced. The issue has thus become part of a wider dispute over how savings should be achieved without increasing the burden on those already providing care.
Meanwhile, the planned higher barriers to receiving care benefits have drawn criticism from the German Nursing Council. The association has called for a comprehensive rethink of the coalition’s proposals. Among its specific concerns are the higher thresholds for receiving a care classification and the planned elimination of the relief benefit for people in the lowest care classification. The council has also warned that a proposed multi-year suspension of tariff-compliance requirements and restrictions on financing future wage increases could weaken the nursing workforce and, as a consequence, affect the provision of care. The council further argues that the federal government should finance training costs in addition to pension contributions for family caregivers, regarding both as responsibilities that extend beyond the individual care recipient. At the same time, the states should fulfill their responsibilities for investment costs. The broader dispute therefore centers on how the financial responsibilities of the federal, state and municipal governments, insurers, caregivers and people receiving care should ultimately be divided within a financially sustainable system.
