(de-news.net) – Germany’s planned long-term care reform is facing criticism over the limited relief it would provide to people in residential care, the financial pressure on contributors, and unresolved structural problems in the care system. Opposition parties argue that the package falls short of agreed coalition objectives, while providers warn that proposed changes could weaken home-based care. At the same time, the need for additional federal loans and higher contributions for childless people highlights the system’s worsening financial pressures. Municipalities also fear that the reform could leave them with substantial additional costs.
The reform is facing growing criticism from opposition parties, care providers, health insurers and municipalities, with the dispute increasingly focused on who should bear the system’s rising costs and whether the package addresses the underlying structural problems. The Federal Cabinet approved the draft following negotiations between the CDU/CSU and SPD, but the most far-reaching changes have been deferred to a planned expert commission. The panel is expected to examine structural reforms and the constitutional implications of a proposed financial equalization mechanism between statutory and private long-term care insurance. The SPD’s separate proposal to cap residents’ out-of-pocket care costs, however, is not included in its mandate.
Health Minister Carsten Linnemann (CDU) has argued that the cabinet’s package should not be understood solely as an austerity measure. Among its provisions are revised criteria for determining care levels, a higher contribution assessment ceiling and increased contribution rates for people without children. Linnemann has also pointed to a more systematic assessment of whether rehabilitation could substantially reduce an individual’s need for long-term care. The broader structural questions, however, have been left to the commission, which the cabinet plans to appoint next week. The commission is expected to present proposals by the end of January, with Linnemann aiming for a draft cabinet bill by Easter. Parliamentary consideration in the Bundestag and Bundesrat is expected before the summer, potentially allowing a second stage of the reform to take effect on July 1, 2027. The timetable reflects the Government’s effort to stabilize the finances of the long-term care insurance system while postponing decisions on some of its most contested structural questions.
Dispute over the proposed care cost cap
One of the most contentious issues is the absence of the SPD’s proposed cap on residential care costs from the commission’s mandate. Linnemann has argued that the proposal would provide relatively limited immediate relief for individuals whose monthly out-of-pocket costs already exceed 3,000 euros. In his assessment, the savings for an individual might amount to only about 300 euros. He has also warned that providers could respond to a statutory cap by raising their prices, potentially causing total costs to increase rather than decline.
Linnemann has instead advocated modifying the financial supplements already available to nursing home residents. Introduced in 2022, these payments are graduated according to the length of time a person has remained in residential care and are intended to cushion the growing burden of personal expenses. The minister has indicated that the planned commission should examine how these supplements could be redesigned to provide more socially equitable and effective assistance. The SPD, however, continues to regard a cap as an essential element of any meaningful reform. Deputy parliamentary group leader Dagmar Schmidt has called for both a constitutionally sound financial equalization mechanism between statutory and private insurance and measures that would directly protect care recipients and their families from further increases in personal costs. The party has proposed limiting the portion of residential care expenses attributable solely to nursing services to 1,500 euros per month.
The scale of the issue is reflected in current costs. In July, the nursing-care component alone averaged 1,775 euros per month, while total monthly expenses, including accommodation, meals and investment costs, averaged 3,364 euros. For the SPD, the figures underscore the need to limit the exposure of households that increasingly have to absorb the cost of long-term care themselves. Manuela Schwesig, the SPD Minister-President of Mecklenburg-Western Pomerania, has likewise rejected the coalition agreement as inadequate. She has argued that the package places additional pressure on families instead of providing meaningful relief and has called for the proposed cap to be reconsidered. Schwesig has also criticized Chancellor Friedrich Merz (CDU), arguing that the Government had failed to draw appropriate conclusions from recent election results. Beyond the question of individual costs, she has challenged the underlying financing arrangements between statutory and private insurance, which she considers structurally unequal.
Opposition sees reform as an incomplete response
The Greens have similarly questioned whether the coalition’s agreement amounts to a substantive long-term reform. Britta Haßelmann, co-chair of the party’s parliamentary group, has argued that the Government lacks both the political resolve and a sufficiently clear vision to implement major structural changes. In her view, responsibility has once again been transferred to an expert commission, leaving the coalition agreement as a compromise shaped largely by what its partners could agree on rather than by a comprehensive redesign of the care system.
Janosch Dahmen, the Greens’ health policy spokesman, has focused more directly on the distributional consequences. He has warned that many people could end up paying more while receiving fewer benefits, making the package difficult to justify as a reform rather than an austerity measure. The concern is shared by Schwesig, who has maintained that the agreement does not constitute genuine reform, and by Sören Pellmann, the Left Party’s parliamentary group leader, who has condemned what he regards as extensive cuts affecting millions of people who require care.
The criticism from different parts of the opposition nevertheless converges on a broader point: the immediate financial stabilization of the insurance system does not necessarily resolve the longer-term question of how Germany will organize and finance care as demand continues to grow. Prevention and a more balanced relationship between statutory and private insurance have therefore emerged alongside out-of-pocket costs as central issues in the political debate.
Providers warn of pressure on home-based care
The Association of German Elderly and Disabled Care Providers, or VDAB, has raised a separate set of concerns about the revised Long-Term Care Reorganization Act, known as the PNOG. Its managing director, Thomas Knieling, has warned that planned reductions in outpatient care benefits remain part of the proposal. In his assessment, this could undermine the established principle that care should be provided at home whenever possible rather than shifted toward institutional settings.
For outpatient care and support providers, the consequences could be substantial. The association expects the proposed changes to create serious economic difficulties and has called for significant revisions. At the same time, the VDAB sees the possibility of a more acceptable approach to financing collectively agreed wages. Providers operating outside existing collective bargaining structures, however, could face greater difficulties under the proposed arrangements.
Knieling has also questioned whether the future expert commission will address the broader question of sustainable care provision or concentrate primarily on the system’s financial and institutional architecture. From the providers’ perspective, the legislation does not yet offer a convincing response to the basic question of how Germany will maintain adequate care services over the longer term.
Additional federal loans highlight financial pressure
The political debate is unfolding against an increasingly difficult financial backdrop. The Federal Finance Ministry plans to make up to 700 million euros in additional loans available to the long-term care insurance system to cover an anticipated funding gap. According to a letter sent to the Bundestag’s Budget Committee, the 3.2 billion euros in federal loans already provided for this year will not be sufficient. The immediate problem is that expenditure by the care insurance funds has risen faster than anticipated as the number of people requiring care continues to increase. The Health Ministry had requested an additional 870 million euros, but the Finance Ministry under Lars Klingbeil (SPD) considers 700 million euros sufficient to cover the projected November shortfall and provide a reserve should financing problems emerge as early as October.
The request for additional funds illustrates the tension at the heart of the reform: the Government is seeking to stabilize the insurance system while demand for care continues to generate higher expenditure. The additional borrowing therefore provides short-term financial capacity but does not by itself resolve the structural financing question that the planned commission is expected to address.
Childless contributors face higher payments
Health insurer DAK-Gesundheit has welcomed one aspect of the compromise while expressing reservations about another. Chief Executive Andreas Storm has praised the removal of significant anticipated spending cuts, arguing that the decision improves the reform’s prospects for public acceptance. At the same time, he has criticized the resulting increase in contributions for people without children. Under the approved package, the general long-term care insurance contribution rate remains at 3.6 percent, while the rate for childless insured individuals is scheduled to rise from 4.2 to 4.5 percent. Storm has warned that the growing difference between the two rates could create constitutional concerns. He estimates that childless contributors will bear an additional burden of approximately 3.3 billion euros, accounting for more than half of the reform’s overall consolidation volume.
For Storm, the issue is not only the size of the additional payment but also the principle behind the differential. A growing gap between the two contribution rates could affect perceptions of fairness and, consequently, public acceptance of a reform that is already politically contentious. Storm has also criticized the Federal Government’s failure to reimburse more than 5 billion euros in pandemic-related financial assistance previously advanced by the long-term care insurance funds. Although Linnemann has supported repayment, Storm has accused Klingbeil of opposing the measure, arguing that the financial consequences will ultimately be borne by contributors.
Looking ahead, the DAK chief has urged the planned commission to examine additional sources of funding, including the possibility of a solidarity contribution from people insured through private long-term care insurance. Such a mechanism, he argues, could contribute to a more balanced relationship between the two insurance systems while generating additional resources at a time when the number of people requiring care continues to rise.
Municipalities warn of a growing fiscal burden
Municipal governments have added another dimension to the criticism, focusing on the costs that local authorities may have to absorb. The German Association of Cities has argued that the reform could impose additional financial burdens on municipalities already facing severe fiscal pressure. Its president, Leipzig Mayor Burkhard Jung (SPD), canceled his participation in a planned meeting with Federal Chancellery Minister Nina Warken (CDU) and representatives of the three major municipal associations, citing the Federal Government’s failure to provide the expected financial relief. Jung has particularly criticized the absence of a cap on out-of-pocket care costs. From the municipal perspective, such a measure could have reduced the amount local authorities must spend on social assistance for people unable to meet their care expenses. He has therefore called on the federal states to reject the legislation in the Bundesrat and send it to the Mediation Committee for further negotiations.
The dispute extends beyond the substance of the reform to the timing of its adoption. The cabinet approved the legislation on September 30, one day before a new cost-sharing principle was due to take effect on October 1. Under that new framework, the Federal Government is expected to cover 80 percent of additional costs imposed on states and municipalities by federal legislation. By approving the care reform immediately before the new rule took effect, the Government ensured that the legislation remained outside its scope. Jung has characterized the timing as a breach of trust and argued that the Government’s commitment to the principle that the level of Government ordering a measure should also finance its costs should not depend on a single calendar day.
The dispute reflects a broader conflict over the distribution of responsibility for Germany’s expanding social expenditure. Municipal associations have been seeking relief from rising costs for more than a year, while the Federal Government is attempting to stabilize the long-term care insurance system under growing financial pressure. Jung has warned that shifting additional costs onto municipalities already facing severe fiscal constraints cannot provide a sustainable basis for financing social insurance.
