German employers are proposing sweeping reforms to the long-term care insurance system. According to plans developed by the Confederation of German Employer Associations (BDA) and reported by the Frankfurter Allgemeine Zeitung (FAZ), individuals receiving care in their first year of needing assistance would have significantly reduced claims on care insurance funds, dependent on their assessed level of need.
The BDA’s proposal outlines a “grace period” or probationary phase, potentially yielding savings of over €6 billion annually – roughly one-tenth of current care expenditures. Supporters suggest a system modeled after the pension insurance, incorporating a “sustainability factor” would prevent runaway contributions should the demand for care and associated benefits increase disproportionately.
Further recommendations include shifting the funding of non-insurance-related care expenses from contributions to the federal budget. Specifically, covering pension contributions for caregivers could alleviate the burden on care insurance funds by approximately €4 billion annually.
The BDA also stresses the importance of ensuring that federal states fully comply with their investment obligations relating to care facilities. Adherence to these obligations could reduce the average monthly contribution required from nursing home residents by almost €500.
Based on FAZ’s analysis of the BDA’s twelve-page document, titled “For a capable and financially viable Social Care Insurance (SPV)” the combined effect of these proposals could generate savings exceeding €16 billion annually – representing 23% of the projected €68.2 billion in total expenditures for 2024. This would potentially decrease the monthly contribution from nursing home residents by more than 20%, to around €2,370.
The BDA’s call for reform is driven by concerns regarding the affordability of the current system and the potential for drastic increases in contributions. “The care insurance can only continue as a partial cash benefit insurance” stated BDA Chief Executive Officer Steffen Kampeter, as quoted in the FAZ. He warned that without substantial reform, younger generations, businesses and the overall economy would suffer.
Federal Minister of Health Nina Warken (CDU) is establishing a working group of federal and state representatives this week to address the challenges and develop proposals for maintaining the financial stability of the care system by the end of the year.