Social long-term care insurance is in financial trouble. It is not the first problem area of statutory social insurance this year. In July, the Bundestag already passed the savings package for statutory health insurance. The National Association of Statutory Health Insurance Funds has warned that the long-term care insurance funds could run out of money as early as October. A deficit of €7.5 billion is expected for next year. Its chair Oliver Blatt speaks of “red alert”.
To close this gap, the Federal Ministry of Labor is looking at the policyholders of private long-term care insurance. Through financial equalization, money is to flow from private to social long-term care insurance. This comes from a paper of the ministry, first reported by the Frankfurter Allgemeine Zeitung. It was apparently written for internal government preparation of the planned long-term care reform.
The paper contains two variants
The proposal is not new. As early as 2024, an expert report of the federal government at the time looked at equalization between the two systems. What is new is that a concrete mechanism is now described.
| Variant | How it works |
|---|---|
| Equalization of per capita spending | If spending per policyholder in private long-term care insurance is lower than in social long-term care insurance, the private insurers pay the difference as equalization. The amount is not to exceed one sixth of the premium income of private long-term care insurance. |
| Equalization of ageing reserves | If a person switches from private to social long-term care insurance, they are to be allowed to take the ageing reserves built up with them, and these flow into the solidarity pool. |
The paper itself assumes that private long-term care insurers would have to raise their premiums with such equalization. The ministry hopes for around two billion euros a year for social long-term care insurance.
The reasoning: a different risk structure
The ministry relies on the different distribution of the need for long-term care. According to an analysis by the research institute of the AOK, around 6.3 percent of people in statutory insurance were in need of long-term care in 2021, compared with 3.2 percent in private long-term care insurance. Care spending per capita there was €234, compared with €683 in social long-term care insurance, almost three times as much.
For 2024, the ministry names care rates of 8.1 percent in social and 4.5 percent in private long-term care insurance. The paper calls this a “serious cost asymmetry” and a reason for privately insured people to share in the general insurance burden.
What the Association of Private Health Insurers argues against it
The Association of Private Health Insurers rejects the proposal and has presented a legal opinion on it. The author is Hanno Kube, director of the Institute for Finance and Tax Law at Heidelberg University. He concludes that such equalization would be an unconstitutional special levy on privately insured people, without a sound justification.
The association’s central argument is the different design of the two systems. In 1994, the legislator deliberately created two separate solidarity communities: a social long-term care insurance financed on a pay-as-you-go basis and a private one funded by capital. Privately insured people build up ageing reserves for their own future care costs. The association’s director Florian Reuther puts it this way: privately insured people would have to pay for the costs of the statutory long-term care funds and at the same time build up reserves for their own provision. He calls this completely unacceptable. The association has announced that it will protect its policyholders before the Federal Constitutional Court if necessary.
Two further points from the legal opinion are interesting for the assessment.
The relief would be small. Kube does the math: two billion euros spread over around 58.3 million members of social long-term care insurance would correspond to an average reduction in contributions of about €2.86 per month. Half of this would go to the employer, leaving €1.43 per member. If you take out the share of the Beihilfe BeihilfeThe state healthcare allowance for civil servants. The Beihilfestelle pays a fixed share of medical costs, the Beihilfesatz, and private insurance covers the rest.More about Beihilfe →, the monthly relief is only 70 cents.
The direction could reverse. People born between 1952 and 1977 make up almost 55 percent of policyholders in private long-term care insurance and almost 45 percent in social long-term care insurance. For demographic reasons, the number of privately insured people in need of care is likely to rise faster. Anyone who wanted to equalize risks consistently might, in an extreme case, soon have to send the money in the other direction.
As an alternative, the association proposes lowering the threshold for compulsory insurance again. More people could then insure themselves against the risk of needing care on a funded basis. This threshold is the same Jahresarbeitsentgeltgrenze that is rising extraordinarily next year and narrowing access to private health insurance further.
An even more far-reaching proposal
A more radical idea comes from another direction. Eugen Brysch, board member of the German Foundation for Patient Protection, has called for social and private long-term care insurance to be merged. His argument: the reserves of private long-term care insurance amount to over €40 billion, which would give social long-term care insurance room to breathe for the next fifteen years.
This is not a position of the federal government, but it shows the range of the debate.
What this actually means for privately insured people
For now: nothing. This is a paper for internal government preparation, not a draft law. Whether the responsible Federal Minister of Health includes the idea in his long-term care reform is open.
If equalization came in the form described, the likely result would be a higher premium for the private Pflegepflichtversicherung PflegepflichtversicherungCompulsory long-term care insurance. Everyone with health insurance in Germany must have it, privately insured people through their private insurer.. It is mandatory for privately insured people and should not be confused with a voluntary long-term care daily allowance taken out in addition. How high the increase would be cannot be stated seriously today, because the design is open. The ceiling of one sixth of premium income is a cap, not a forecast.
In our view, the debate changes nothing about the decision between statutory and private cover. The premium for the private Pflegepflichtversicherung is a comparatively small part of the total burden, and the arguments for or against private health insurance lie elsewhere: in the benefits, in your state of health and in whether the premium stays affordable in the long term. How you can tell is explained in the article on premium stability.
Our assessment
The financial situation of social long-term care insurance is real and unresolved. However, equalization that, according to the expert’s calculation, brings 70 cents to €1.43 per member and month does not solve this problem. It shifts it. What private cover actually costs depends on quite different factors, explained under private health insurance costs.
For privately insured people, the more important point is a different one: the reserves in private long-term care insurance are not free capital, but the consideration for premiums paid precisely for this purpose. Whether access to them would be permissible is a constitutional question that courts will answer in the end. We are insurance brokers, not lawyers, so here we stick to what is documented: there is a paper, there is a counter-opinion, and there is no decision.
Conclusion and outlook
Financial equalization from private to social long-term care insurance is on the table, capped at one sixth of premium income and supplemented by a rule on ageing reserves when switching systems. The Association of Private Health Insurers considers both unconstitutional and has announced legal action.
Nothing has been decided. We are following the long-term care reform and will update this news item as soon as a ministry draft bill is available.
Frequently asked questions
As a privately insured person, do I now have to expect an additional levy?
No. This is a reform proposal from a ministry paper, not current law. Whether the responsible Federal Minister of Health takes up the idea at all is open. Until a law is passed, this debate changes nothing about your premium.
Would my premium for the private Pflegepflichtversicherung rise?
If equalization came in the form described, that would be the likely result. The paper itself assumes that private long-term care insurers would have to raise their premiums. The amount would depend on how the equalization is designed in the end.
What happens to my ageing reserves?
The second variant named in the paper concerns exactly this point. If someone switches from private to social long-term care insurance, the ageing reserves built up are to move with them and flow into the solidarity pool. For policyholders who stay in private health insurance, this changes nothing directly.
