Germany's €22 Billion Care Crisis Sparks Controversial Austerity Plan
Germany’s long-term care insurance system is facing a €22 billion shortfall over the next two years. Health Minister Nina Warken is now preparing an austerity package to tackle the crisis, with plans to unveil it by mid-May.
The proposed changes would delay subsidies for residential care and reduce support for family caregivers, sparking criticism from industry leaders. Under the current system, care home residents receive increasing subsidies, reaching a maximum of 70% coverage from the fourth year. Residents currently pay an average of €3,200 per month out of pocket.
Warken’s plan would push back these subsidy increases, capping coverage at 70% only after four and a half years. Heinz Rothgang, a health economist, estimates this delay would raise monthly costs for residents by €161. Over the extended period, each resident would face nearly €20,000 in extra expenses.
The reforms may also cut pension entitlements for family caregivers by half. Andreas Storm, head of health insurer DAK, has strongly opposed the proposals, calling for a complete halt to the changes.
Without intervention, the system’s deficit will continue to grow, putting further strain on residents and caregivers alike. Warken’s austerity measures aim to stabilise the long-term care system by reducing costs. If implemented, residents will pay more for longer before receiving full subsidies. The final decision on the reforms is expected after the mid-May announcement.
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