(de-news.net) – In the face of mounting financial strains, the German Government is contemplating a 10-percent cut in long-term care insurance costs as a recently formed reform commission gets to work. The SPD and social groups have criticized Health Minister Carsten Linnemann (CDU). The Minister is not ruling out benefit changes, while employers and economists favor more focused investment. The allocation of financial obligations, the safeguarding of family caregivers, and the future equilibrium between statutory and private insurance are the main points of contention.

German Health Minister Carsten Linnemann (CDU) has raised the possibility of reductions in statutory long-term care insurance benefits, arguing that expenditure must be cut by approximately 10 percent to address the system’s structural financing problems. The debate comes as the number of people requiring long-term care has more than tripled over the past two decades, increasing from two million to more than six million. Without corrective measures, the insurance system would face a deficit of nearly 8 billion euros in 2027.

Linnemann intends to make benefit allocation more precisely targeted toward those with the greatest needs, although he has not ruled out reductions in individual areas. He also pledged not to increase copayments for statutory health insurance in 2027, following an increase this year. Further decisions on potential savings would depend on recommendations from the Health Finance Commission. In the longer term, his objective is to stabilize contribution rates beyond 2027 and eventually bring them down again.

Calls for a more equitable financing model

Linnemann’s position has prompted criticism from within the governing coalition and among social organizations, particularly over whether expenditure reductions should take precedence over structural changes to the financing system. SPD health policy spokesman Christos Pantazis rejected the assumption that across-the-board benefit cuts were unavoidable, arguing that efficiency improvements, reduced bureaucracy, better care structures, and fairer financing arrangements should first be fully explored. He advocated a more solidarity-based insurance system and proposed establishing a constitutionally compliant financial equalization mechanism between statutory and private long-term care insurance. According to estimates, such an arrangement could provide annual financial relief of between 3 billion and 3.5 billion euros for the statutory system. Pantazis welcomed the commission’s mandate to examine these possibilities, while stressing that federal and state governments must also meet their respective financing obligations.

The German Social Association VdK has similarly warned against establishing savings targets before the commission has completed its work. Its president, Verena Bentele, argued that Linnemann’s statements risk undermining public confidence by creating the impression that the outcome of the reform process has already been determined. She called for the experts to work independently and for benefit reductions to be explicitly ruled out. Bentele also questioned the Minister’s intention to target benefits more precisely, warning that this approach could result in less support for people whose need for care frequently emerges unexpectedly following illness or accidents. In her assessment, the central problem is inadequate financing rather than excessive entitlements. She therefore advocated broader solidarity-based contributions, including from higher-income groups, civil servants, and self-employed people, alongside limits on patients’ out-of-pocket expenses.

New commission tasked with developing proposals by January

Meanwhile, the Federal Government’s newly established 13-member Nursing Care Structure Commission has begun work on a comprehensive reform package. Its members are expected to submit recommendations by the end of January, providing the basis for legislative amendments scheduled to enter into force on July 1. The panel’s mandate includes analyzing expenditure trends, developing sustainable financing arrangements, improving the quality of care, and expanding preventive and rehabilitative services. Its membership brings together nursing professionals, economists, legal experts, healthcare researchers, nursing scientists, and specialists in healthcare provision and counseling.

The commission will also consult people directly affected by care needs, service providers, and municipal representatives. Linnemann has emphasized the importance of involving local authorities, which increasingly face financial pressure because they must cover care costs when insurance benefits and individuals’ income and assets are insufficient, particularly in residential facilities. Municipalities are therefore an important part of the reform debate, as financial shortfalls in the insurance system can also increase pressure on local public budgets.

The commission is chaired by Georg Cremer, former secretary-general of the German Caritas Association and a member of the federal pension commission, and Gabriele Kuhn-Zuber, president of the Catholic University of Applied Social Sciences in Berlin since 2021. Its deliberations will also take account of relevant findings from the Health Finance Commission and the federal-state working group on the Future Pact for Care. The Government’s stated objective is to secure reliable care provision while keeping statutory long-term care insurance contribution rates stable into the years beyond 2030. The commission must therefore address both the immediate financing shortfall and the longer-term sustainability of the system.

Employers favor more targeted benefits and waiting periods

Business representatives have expressed support for Linnemann’s proposed savings target, although their recommendations focus particularly on how insurance benefits should be distributed. Steffen Kampeter, chief executive of the Confederation of German Employers’ Associations (BDA), argued that available resources should be concentrated more heavily on people who require particularly intensive and prolonged care. He also proposed introducing a graduated waiting period before insurance benefits become payable. In residential care, subsidies toward recipients’ out-of-pocket expenses should, in his view, be concentrated on those who have spent more than 24 months in care facilities.

Kampeter welcomed the Minister’s willingness to identify the scale of the financial challenge, arguing that the projected deficit of nearly 8 billion euros in 2027 demonstrated the urgency of reform. He maintained that a comprehensive restructuring of the insurance system was necessary to prevent further financial deterioration. His proposals reflect an approach that seeks to prioritize longer-term and more intensive care needs when allocating limited resources.

Economic researchers warn against indiscriminate reductions

Marcel Fratzscher, president of the German Institute for Economic Research (DIW), has also described Linnemann’s 10 percent savings target as achievable, while cautioning that the distribution of any reductions would be decisive. He argued that indiscriminate cuts could produce socially and economically damaging consequences, particularly if low-income households and people with limited savings were disproportionately affected. Some groups, he added, might actually require substantially more assistance rather than less.

Fratzscher identified approximately one million people, predominantly women, who provide care for relatives without receiving corresponding long-term care insurance benefits as a particularly important group. In his view, the system must be based more firmly on solidarity, with higher-income groups assuming a greater share of the financial burden. Such an approach could help contain payroll-related labor costs while improving protection for households with limited income and assets. For Fratzscher, therefore, expenditure reductions alone would not constitute a comprehensive reform program; the distribution of financial responsibilities and the protection of vulnerable groups would be equally important.

Patient protection advocates demand greater federal responsibility

The German Foundation for Patient Protection has also criticized the Government’s approach, accusing it of pursuing contradictory policies. Its chairman, Eugen Brysch, warned that planned reductions under the Nursing Care Reorganization Act would place approximately five million people receiving care at home, together with their relatives, under severe pressure. He cautioned that weakening family caregivers could force hundreds of thousands of additional people into residential facilities, where both staffing and available places are already insufficient.

Brysch argued that the Federal Government should assume greater responsibility for costs that should not be borne by the long-term care insurance system. Among his proposals were the repayment of 5 billion euros in outstanding pandemic-related expenses and federal coverage of annual pension contributions exceeding 5 billion euros for family caregivers. He also called for constitutionally compliant arrangements to bring statutory and private long-term care insurance closer together, thereby broadening the financial basis of the system.

Pantazis similarly welcomed the commission’s examination of a fairer distribution of financial responsibilities between the two insurance systems. He described this as an important step toward ensuring that solidarity extended beyond the boundaries of individual insurance arrangements. The broader reform objective, he emphasized, should combine reliable care provision, sustainable financing, and greater social equity rather than treating expenditure reductions as an isolated solution.

Social association calls for protection of people requiring care

The Social Association of Germany (SoVD) has also urged the commission to avoid turning the reform into another exercise primarily focused on reducing expenditure. Its chairwoman, Michaela Engelmeier, expressed confidence that the experts could develop constructive proposals but stressed that people requiring care and their relatives must remain at the center of the process. Reform measures should reflect the actual needs of both home-based and residential care rather than concentrate exclusively on financial savings.

The association called for stronger federal participation in financing socially necessary services, a fairer financial equalization mechanism between private and statutory long-term care insurance, and improved support for family caregivers. Engelmeier argued that the system must provide dependable protection, strengthen care structures over the longer term, and ensure that access to adequate care does not depend on an individual’s financial resources.

The commission’s deliberations will therefore take place amid competing demands for expenditure discipline, broader solidarity, and the protection of existing benefits. While employers and economic researchers have acknowledged the need to reduce costs, social organizations and SPD representatives have emphasized that financing reforms and a fairer distribution of responsibilities must remain central to the process. Its recommendations, expected by the end of January, will determine how the Government seeks to reconcile these priorities ahead of the planned legislative changes in July.