German employers are proposing significant reforms to the long-term care insurance system. According to plans drawn up by the Confederation of German Employers’ Associations (BDA) and reported by the Frankfurter Allgemeine Zeitung (FAZ), individuals receiving care in their first year of need may face limited claims against care insurance funds, depending on their level of need. This proposed “waiting period” or “grace period” is estimated to potentially save approximately one-tenth of current care expenditures, exceeding six billion euros annually.
The BDA’s proposals, outlined in a twelve-page document titled “For a viable and financeable Social Care Insurance (SPV)” advocate for an additional “sustainability factor” – modeled after the system in place for pensions – to prevent contribution rates from escalating rapidly as the number and demands of care recipients increase. Furthermore, the BDA urges a shift in funding responsibility, proposing that non-insurance related expenses be covered by the federal budget rather than through contributions. Specifically, the assumption of pension contributions for caregivers is suggested as a measure that could relieve care funds by approximately four billion euros annually.
The proposed reforms also address the financial burdens faced by care homes. The BDA is calling for the German states (Länder) to fully comply with their investment obligations related to care facilities. This action is projected to reduce the average monthly co-payment for residents of care homes from roughly 3,000 euros to approximately 2,370 euros, a reduction of almost 500 euros.
Overall, the BDA’s proposals, which include these points, are estimated to generate savings of over 16 billion euros annually – representing a 23 percent reduction compared to the provisional total expenditures of 68.2 billion euros in 2024.
These suggestions are intended to contribute to the broader care reform agreed upon in the coalition agreement between the conservative and social democratic parties and are being considered alongside efforts led by Federal Minister of Health Nina Warken (CDU). Minister Warken has established a joint federal-state working group, tasked with developing recommendations to ensure the long-term affordability of care.
BDA Chief Executive Officer Steffen Kampeter, in comments to the FAZ, emphasized the need for comprehensive reform, stating that the system’s viability depends on a more targeted, shared-cost approach and that without significant changes, drastic contribution increases are inevitable, impacting younger generations, businesses and the overall economy.
