Berlin's €7.6 Billion Care Reform Plan: Higher Premiums, Lower Benefits, and a 'Slap in the Face' for Family Caregivers

Germany's social long-term care insurance is staring at a €7.6 billion deficit in 2027, a gap that threatens to swell to €15.4 billion by 2028 and to a cumulative €57 billion by 2030. To stave off insolvency, Health Minister Nina Warken (CDU) has unveiled a draft reform that would squeeze €11.3 billion in savings and extra revenue from the system that year — rising to over €20 billion annually by the end of the decade. But the package has drawn blistering criticism from unions, social welfare groups, and health insurers, who accuse the government of balancing the books on the backs of the most vulnerable.

Central to the plan is a scaling back of benefit increases. Starting in 2028, the government will link the annual rise in care benefits to general wage growth instead of the current cost-of-living adjustment, a move projected to save roughly €4 billion per year. In a separate cost-cutting measure, the statutory obligation for nursing homes to pay collectively bargained wages will be suspended from 2027 through the end of 2030. The health ministry argues this will close a refinancing gap for care providers, but critics call it a green light for wage suppression that will deepen the already acute shortage of nursing staff.

Residents of care homes and their families will bear the brunt of the changes. State subsidies toward care-home costs will now climb more slowly: the top tier of 75% assistance will only be reached after 4.5 years of residence, instead of the current three years. Each subsidy step is delayed by six months. With the average out-of-pocket cost already at €3,245 per month during the first year in a home, advocacy groups warn that many families will be pushed past their financial limits.

The reform also slashes the pension insurance contributions the care fund pays for family caregivers — cutting them to 70% of the current level. That saves the care fund €1.8 billion in 2027 alone, but the VdK, Germany's largest social welfare association, branded the move a "slap in the face," warning it will accelerate old-age poverty, particularly among women. Other belt-tightening measures include stricter criteria for obtaining a care level, elimination of the relief allowance for the lowest care level (Pflegegrad 1), and the near-total abolition of contribution-free spousal co-insurance starting in 2028. Only spouses caring for children under seven or a partner with care level 2 or higher will be exempt.

On the revenue side, the government will raise the contribution assessment ceiling ahead of schedule, increase the surcharge for childless members by 0.1 percentage points to 0.7%, and make all mini-jobs (low-wage positions) fully subject to care insurance contributions — a change expected to bring in around €1.2 billion. The only note of support came from the Association of Private Health Insurance (PKV), though even it questioned whether the measures were enough for long-term stabilization. The umbrella organization of statutory health insurers (GKV-Spitzenverband) decried a one-sided burden shift onto the insured, while the German Trade Union Federation (DGB) called the proposal a "destruction reform" that undermines the welfare state.

Sylvia Bühler of the ver.di union warned the tariff suspension would drive down wages and worsen the staffing crisis. Her union already organized protests at more than 50 hospitals in late May against wider healthcare cuts. A further demonstration is planned for June 10 in Hannover, coinciding with the meeting of state health ministers. The legislation is scheduled to take effect in January 2027.

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