The cost of has risen to an average of €3,248 ($3,760) per month, according to the German Association of Nursing Homes (vdek), an association that represents the interests of several statutory health insurance providers. This is likely to be a crippling sum for many Germans, considering that .
German Health Minister Nina Warken (CDU) believes there’s an urgent need for reform of long-term care insurance. “The gap between income and expenditure has now diverged dramatically. This cannot continue,” she told the Funke Media Group newspapers.
Statutory long-term care insurance has been part of the German social security system for 30 years, as part of a compulsory insurance policy shared by employers and employees. Currently, 3.6% of income is due for this contribution. However, long-term care insurance covers only a part of the costs. Almost one in three nursing home residents relies on welfare payments to supplement their income.
Beate Linz-Esser, the managing director of the Erikaweg senior citizens’ center in Hilden, , told DW there was great uncertainty among the residents in her facility.
“These constantly rising care costs are a heavy burden for our residents,” she said. “Then there’s the constant fear of not knowing how long their own income or assets will be sufficient to cover the costs.” Residents must contribute to the care costs with their income or savings.
More older people, increasing costs
The for Germans, currently standing at 79 years for men and 84 for women. In December 2023, around 5.7 million people were in need of care, according to the Federal Statistical Office, a number that is expected to increase by 37% by 2055 due to the aging population.
Around 85% of elderly people are cared for at home by relatives and outpatient care assistants. The nursing care insurance fund pays them between €350 and €990, depending on the level of care required.
However, many people in need of care live in nursing homes, where costs have been rising sharply for years.
Children are only required to contribute to their parents’ care costs if their annual gross income exceeds €100,000. This does not apply to most people, as the average annual income in Germany is around €55,000.
Back in 2018, care home residents had to pay only €1,772 a month. Health care economist Heinz Rothgang said the increase can be explained primarily by two factors: “For a long time, nursing was a poorly paid profession. But over the past 10 years, wages in nursing have risen more sharply than in the rest of the economy; by roughly double,” he told DW. Added to this is an increase in the number of nursing staff in care homes.
Care home residents have to pay not only for care, room and board, but also for maintenance and nursing training. Of the €3,248 in nursing care costs, this accounts for €1,488. And all these costs continue to rise.
Linz-Esser is particularly annoyed that almost half of the monthly fee goes into training and maintenance. “It is unacceptable that the residents have to pay for the training of nursing staff,” she said. “And the investment costs — in hospitals, the state or federal government covers that. Our residents have to pay for that, too.”
Over the years, however, the out-of-pocket costs that those in need of care have to pay have decreased, making stays in a nursing home gradually less expensive for the individual resident. But the system is on the verge of collapse.
What’s the solution?
Health Minister Warken wants to set up a reform commission to come up with a plan. This year and next, the federal government will pay €2 billion into the long-term care insurance. But taxpayers’ money will only help in the short term.
Rothgang has two proposals for a fundamental reform: “One option is to introduce tax revenue into the system, federal subsidies like those already found in pension and health insurance,” he said.
“A second possibility would be to get people to pay more, especially those with higher incomes. One could say that all income would be subject to contributions, including capital or rental income, for example,” he added.
The Federal Audit Office is also sounding the alarm, predicting a financial shortfall for the current system of over €12 billion by 2029.
This article was originally written in German.
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