German Long-Term Care Insurance Faces Unprecedented Financial Crisis

Despite recent contribution increases, the system warns of severe funding shortages by 2026 without urgent government intervention.

The German long-term care insurance system reported a projected deficit of €1.55 billion for 2024, with an expected minor shortfall of €300 million in 2025.
Recent contribution rate increases, including a 0.2 percentage point hike in January 2025, are insufficient to address rising costs, which grew by over 11% in 2024 and are expected to exceed this rate in 2025.
The number of beneficiaries is increasing rapidly, and reforms from 2023 raised payments for in-home and institutional care by 4.5%, adding €1.8 billion in costs.
Short-term liquidity measures will keep care funds operational in 2025, but officials warn of a potential existential crisis in 2026 without structural reforms.
Political parties are under pressure to propose sustainable solutions during the election campaign, with varying approaches, including limiting out-of-pocket costs and introducing state-funded or private insurance components.