Germany's long-term care system faces €22.5 billion collapse by 2028

Germany’s long-term care insurance system is under severe pressure. After 31 years, it now faces its biggest financial crisis yet. Rising costs and unpaid debts have pushed the system to the brink.

The care insurance fund is spending far more than it receives. Residents’ personal contributions have already reached their maximum, leaving little room for further increases. The financial strain stems from multiple unmet obligations. The federal government still owes the care insurance fund €5 billion in unpaid COVID-19 debts. Additionally, it has failed to reimburse around €10 billion this year for pension contributions owed to family caregivers.

Federal states have also neglected their role. By not covering investment costs in nursing homes, they leave residents paying an extra €500 per month on average. If states fulfilled this responsibility, immediate financial relief would follow.

Health Minister Nina Warken (CDU) is now preparing a response. A draft law for care reform is expected by mid-May. Without action, the system’s combined deficit could reach €22.5 billion by 2027 and 2028.

The insurance system was never designed to cover all long-term care costs. It provides only partial support, leaving residents and local authorities to bridge the gap. With contributions already at their limit, further strain risks making care unaffordable for many. The survival of Germany’s care insurance depends on urgent reforms. Both the federal government and states must address unpaid debts and investment shortfalls. Without these steps, residents will continue facing unsustainable costs, and the system’s stability will remain at risk.