The federal and state governments are facing nursing care reform: a billion-dollar gap is looming!

The federal and state governments are facing nursing care reform: a billion-dollar gap is looming!

Negotiations between the federal and state governments on fundamental reforms of long-term care insurance will begin in Berlin on July 7, 2025. These first meetings of the federal-state commission for nursing care reform are taking place against the backdrop of alarming financial prospects. According to the Federal Audit Office, nursing care funds face a financial gap of 12.3 billion euros by 2029. Already in 2024, social long-term care insurance had a deficit of 1.54 billion euros, and in the first quarter of 2025 the deficit totaled around 90 million euros, despite a contribution increase of 0.2 percentage points.

There are many people insured in social nursing care insurance (SPV); Around 73.3 million people in Germany, i.e. around 90% of the population, are registered there. The increase in people in need of care is also worrying: in December 2023, almost 5.7 million people were recorded as needing care, an increase of 730,000 compared to 2021. In this context, important associations of those affected, such as BAGSO, SoVD and VdK, criticize the fact that their voices are not being heard in the reform process. They demand that the concerns of people in need of care and their relatives be included in the negotiations.

Financing problems and suggestions for reform

The experts warn that without early measures, such as greater financial involvement from the federal and state governments, there could be a risk of significant reductions in benefits. Federal Health Minister Nina Warken emphasizes the need to create incentives for private provision. It makes it clear that without additional funds from the budget discussions in the Bundestag from January 2026, an increase in contributions would be unavoidable.

The debate is additionally fueled by proposals from the Federal Association of German Employers (BDA and other employer associations), which propose a reduction in benefit entitlements for those in need of care in the first year of care. Such a “waiting period” could, it is estimated, enable annual savings of over 6 billion euros. However, Anja Piel, a representative of the German Pension Insurance, criticized these plans as unsustainable.

Necessary measures for relief

Instead of savings through benefit cuts, the social association VdK is calling for solid comprehensive care insurance that includes all types of income. Diakonie Deutschland also sees the need for comprehensive long-term care insurance with limited co-payments. In particular, personal contributions in inpatient care should be capped, while the tax subsidy for care should be reintroduced. The National Association of Statutory Health Insurance Funds warns that the existing financing problems must not be postponed any further into the future.

Another alarming figure concerns the financial burden of non-insurance benefits, which burden the SPV with around 15 billion euros annually. In addition, the federal government is obliged to reimburse the nursing care insurance company 5.2 billion euros for corona costs, but currently shows no intention of repaying it.

Amid these challenges, one of the central points of the ongoing negotiations appears to be the inclusion of the voices of those affected and interest groups. Minister Warken has promised to focus on this aspect. The groundbreaking reform process is seen as crucial for the financial stabilization of long-term care insurance in the face of demographic change.

Conclusion: The challenges are great and the reform process is under pressure - both financial and social. The next steps will be crucial for the future of long-term care insurance in Germany.

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