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Why long-term care insurance fees are likely to rise in Germany next year

Imogen Goodman
Imogen Goodman - [email protected]
Why long-term care insurance fees are likely to rise in Germany next year
A carer pushes a walking frame at a care home for eldery people in Lower Saxony. Photo: picture alliance/dpa | Sina Schuldt

Social contributions could be set to rise yet again in Germany with a potential hike in the cost of long-term care insurance. Here's what you need to know.

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Following a rise in additional health insurance fees at the start of the year, insurance funds have warned that a further hike in fees could be needed.

Speaking to the regional Rheinische Post, several statutory funds revealed that rising costs could be placed on the shoulders of workers in Germany as early as next year. 

Why are health insurance companies threatening a hike in fees?

Though the healthcare system in Germany is relatively complicated, the reason for a potential rise in care contributions is a simple one: there just isn't enough money to fund the sector.

According to the Rheinische Post, health insurance funds are forecasting a huge black hole in their finances at the start of next year and expect to bring in just a third of what they need in order to meet demand.  

"The long-term care insurance funds assume that the financial resources in the first quarter of 2025 will amount to less than one month's expenditure," the Association of Statutory Health Insurance Funds in North Rhine-Westphalia told the regional newspaper. 

"In this case, the federal government may raise the contribution rate by statutory order."

READ ALSO: What foreigners need to know about old-age care in Germany

Fears about the financial future of care were shared by Verena Bentele, the president of the VdK social association. Speaking on RBB, Bentele argued in favour of propping up the struggling care sector using tax revenues. 

"It one of society's important tasks to subsidise care from tax revenue if the system would otherwise collapse," she said. 

How much could insurance contributions rise by?

This isn't entirely clear so far, though experts in the sector have suggested than the rise would be relatively incremental.

According to Andreas Storm, the CEO of the DAK insurance fund, 0.2 percent is a plausible number.

Currently, people with children pay 3.4 percent of their income into the long-term care funds, while childless people pay four percent. For those in employment, however, the contributions are split between the worker and the employer, meaning most people pay either 1.7 percent or two percent each month.

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Self-employed people, meanwhile, are usually required to cover the full cost of social contributions themselves, meaning this group could be hit hardest by any potential hike in fees. 

What other issues are affecting long-term care in Germany?

Alongside the difficult financial situation, the care sector - like many other professions in Germany - is also struggling to plug a shortage of skilled staff, according to the German Council of Nurses. 

According to the council's president, Christine Volger, there is already a shortage of around 115,000 full-time professionals in the care sector, which could rise to 500,000 by 2034.

One major issue is Germany's aging population, with longer life expectancies increasing the demand for long-term care at the same time as qualified employees enter retirement. To make matters worse, many of the nurses in the sector also opt for part-time work. 

Nursing home in Baden-Württemberg

Elderly patients play a fitness-focussed ball game at a nursing home in Burladingen, Baden-Württemberg. Photo: picture alliance/dpa | Bernd Weißbrod

"The gap between supply and demand is worsening," Volger told Bild. 

On Monday, Health Minister Karl Lauterbach (SPD) said Germany had experienced an "explosive" rise in the number of people needing care, with 360,000 new patients requiring support in 2023. 

READ ALSO: Germany sees 'explosive' hike in people needing old-age care

The Medical Service of the Health Insurance Funds (MDK) also expects a big hike in care cases due to the prevalence of dementia.

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If there is no breakthrough in therapy and prevention, the number will continue to rise sharply, Carola Engler, deputy chairwoman of the MDK, told the Augsburger Allgemeine newspaper.

There is already evidence of this happening: in 2023, health insurance funds processed around 160,000 more applications for dementia care than in 2022. 

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