German Cities' Association calls for conversion of long-term care insurance into full coverage

The background to the debate is the financial imbalance of social long-term care insurance. The Federal Ministry of Health had recently launched several measures with the Long-Term Care Reorganization Act (Pflegeneuordnungsgesetz) to stabilize finances, close billions in gaps and avoid general contribution increases. However, the reform is facing criticism from municipalities and welfare associations because it does not sufficiently resolve the structural problems.

Background: The federal Long-Term Care Reorganization Act

Jung pointed out that many cities and municipalities could barely offset the rising personal contributions of those in need of care. More and more people living in nursing homes or receiving outpatient care are dependent on supplementary social welfare. This is placing a massive burden on municipal budgets. From the Cities' Association's perspective, a full coverage insurance would significantly reduce personal contributions and ease the burden on municipalities.

The move is part of a broader debate about the future of care in Germany. In light of the aging society, the number of people in need of care is growing steadily, while the number of contributors is declining in relative terms. The Cities' Association had already warned in earlier statements about the overburdening of cities and called, among other things, for a federal subsidy to long-term care insurance as well as a dynamic adjustment of benefits.

There were mixed signals from the CDU and SPD regarding the Cities' Association's demand. While parts of the Union were open to a fundamental debate on care financing, SPD representatives pointed to ongoing negotiations on the Long-Term Care Reorganization Act and warned against rash systemic breaks. Both sides emphasized that a full coverage insurance would have far-reaching consequences for contributors, employers and taxpayers.

Reactions from the CDU and SPD

The Cities' Association also pointed to experiences in other European countries where care is financed to a greater extent through taxes or through full coverage. The association initially did not present a final financing estimate for a full coverage insurance in Germany. What is clear, however, is that without structural reform, the gap between income and expenditure will continue to grow.

Jung announced that the Cities' Association would speak with members of the Bundestag and state representatives about the model in the coming weeks. The goal is to develop a joint proposal that could still be deliberated in this legislative period. Until then, the federal government must ensure that the ongoing reform at least addresses the most urgent financing problems.

Look at European models

Observers see the move as further pressure on the federal government to treat the issue of care financing not only as a question of contributions but also as a structural issue. It remains open whether the coalition of CDU and SPD can agree on a fundamental restructuring of long-term care insurance or merely tighten the existing regulations.

The proposal for a full coverage insurance is not new in German social policy. Already after the first reforms of long-term care insurance in the 1990s, models of tax-financed or fully comprehensive coverage were discussed. With this renewed push, the debate is gaining new momentum in light of demographic developments and the strained financial situation of the social insurance funds.