(de-news.net) – Germany’s Federal Government is still to overcome divides over the planned long-term care reform, particularly over financing, cost caps and the role of private and statutory insurance. Health Minister Carsten Linnemann (CDU) is putting financial stabilization first, while the SPD is pushing for structural adjustments and caps on patients’ out-of-pocket expenses. In order to keep rising healthcare expenses from being transferred onto local budgets, counties, towns, and municipalities are also calling for adjustments. The dispute comes as the long-term care insurance system faces a projected deficit of 4.4 billion euros this year and potentially 10 billion euros in 2027.
The governing CDU/CSU and SPD remain at odds over key elements of the legislation ahead of today’s scheduled Cabinet decision on long-term care reform, leaving unresolved questions about both financing and the future structure of the system. SPD parliamentary leader Matthias Miersch said after a conference in Bremen that the reform should establish either a common, solidarity-based framework or, at a minimum, a fair financial adjustment between private and statutory long-term care insurance. For the SPD, the dispute extends beyond immediate savings: the party is pressing for structural changes to the way long-term care is organized and financed.
In a joint statement, SPD parliamentary groups at the federal, state and European levels emphasized that long-term care should not place patients or their families at risk of poverty. People who have worked throughout their lives and paid into the system, they argued, should be able to rely on adequate care when they eventually need it. The groups therefore support an effective cap on care-related costs, while also calling for greater consideration of how the financial burden should be distributed across the system.
Federal Health Minister Linnemann plans to present his reform bill to the Cabinet today, with stabilizing the finances of long-term care insurance as its central objective. He rejected the SPD’s demands over the weekend, underscoring the unresolved differences within the governing coalition. His proposal includes changes to the criteria for obtaining a formal care level, while structural questions concerning long-term care are expected to be examined by a commission beginning in October.
Cities and counties push back against shifting care financing
Jochen Ott, the SPD parliamentary leader in North Rhine-Westphalia, sees Chancellor Friedrich Merz (CDU) as an important catalyst for reconsidering the existing financing model. He linked the SPD’s demand for greater participation by private long-term care insurance to what he described as the chancellor’s recent call to revisit questions of fairness in the system. Ott also supports a cap on patients’ care costs, arguing that rising out-of-pocket payments could become difficult to sustain even for people receiving adequate pensions and additional occupational retirement income. On the financing side, he has proposed a risk-adjustment mechanism between private and statutory long-term care insurance, which he estimates could mobilize about 3 billion euros.
Meanwhile, Germany’s county governments have rejected savings measures that would reduce public support for residential care costs. Achim Brötel (CDU), president of the County Council, warned that the Federal Government should not address the insurance system’s financial problems by shifting additional costs onto care recipients and municipalities. He therefore supports a genuine cap on residential-care expenses, arguing that long-term care insurance should again cover a more reliable share of actual care costs. The proposal reflects a broader concern among local authorities that financing gaps at the insurance level can ultimately translate into higher municipal expenditures.
The counties’ warning comes as the governing coalition continues negotiations over the reform. Although additional discussions between the Union and SPD were expected, it remained unclear on Tuesday whether Linnemann’s bill would reach the Cabinet as scheduled. The counties have a direct financial interest in the outcome because local social welfare offices step in when patients and their families cannot cover the remaining costs of residential care. The county association has consequently characterized municipalities as effectively functioning as a second long-term care insurer. Under the current draft, additional expenditures for care assistance could amount to roughly 1 billion euros in 2027 and, as demographic pressures intensify, potentially reach about 12 billion euros annually over the longer term.
Rising deficits put long-term care reform under greater pressure
Cities and municipalities are also calling for significant revisions while supporting the SPD’s proposal to cap residential-care costs. André Berghegger, managing director of the German Association of Towns and Municipalities, said municipal spending on care assistance had increased by one-third over three years, reaching 6 billion euros. Against that backdrop, he argued that containing the growth of these expenditures should be a central objective of the reform. A cap on patients’ contributions could help achieve that by reducing the amounts municipalities would have to cover when individuals are unable to meet their required payments.
Berghegger also calls for several changes to the financing framework. He wants the federal government to reimburse funds that were taken from the long-term care insurance system during the pandemic and to establish a permanent, dynamically adjusted federal contribution. His position is that long-term care constitutes a broader social responsibility and should therefore receive a corresponding level of public financing. The states, he added, should contribute to infrastructure financing as well, with the aim of reducing the costs associated with residential care.
Burkhard Jung (SPD), president of the German Association of Cities, is likewise seeking substantial changes to the draft legislation. While he considers the proposed care-cost cap an appropriate initial measure, he argues that patients’ contributions should eventually be reduced further, potentially lowering the risk that people requiring care fall into poverty. Jung has also cautioned against rushing the legislation through the Cabinet if the resulting reform would leave municipalities responsible for a substantial share of the long-term care insurance system’s financing problems. Over the longer term, the Association of Cities supports comprehensive long-term care insurance designed to cover care costs in full.
The financial situation is already placing considerable pressure on the system. The umbrella organization representing statutory health and long-term care insurers has warned that, without additional funding, the care insurance system could face insolvency as early as October. A deficit of 4.4 billion euros is expected this year, while the financing gap could widen to 10 billion euros in 2027. The figures underscore the central tension surrounding the reform: the coalition is seeking to stabilize the system’s finances while local governments, patients and their families are pressing for limits on how much of the resulting costs they must ultimately bear.
