German Association of Cities calls for full long-term care insurance to relieve municipalities

Municipal Relief: German Cities Association Calls for Comprehensive Long-Term Care Insurance

When people cannot afford a place in a nursing home, the social welfare office can step in. But municipalities are already overburdened, says Cities Association President Jung. He is advocating for comprehensive insurance coverage.

The German Cities Association (Städtetag) has come out in favor of transforming long-term care insurance into comprehensive coverage. "This way, people who have worked hard all their lives would no longer fall into social welfare because of care costs," said Cities Association President Burkhard Jung (SPD) in an interview with the Neue Osnabrücker Zeitung. For municipal budgets, such a transition would mean "relief amounting to billions of euros year after year."

The Cities Association is also pushing for a cap on the financial burden placed on nursing home residents. "One option would be to introduce a cap on personal contributions, set higher or lower depending on income," said Jung, who serves as mayor of Leipzig. A possible model could be the approach proposed by Saarland Minister-President Anke Rehlinger (SPD), which would have insurers cover personal contributions exceeding 1,500 euros. The federal government, states, and municipalities would need to jointly co-finance such a cap.

Municipalities Frequently Forced to Cover Care Costs

The push is also driven by the growing financial strain on cities and municipalities, Jung said. "With a deficit of 30 billion euros every year, municipalities are completely up against the wall." Yet they are required to step in when senior citizens can no longer afford nursing home places on their own. In Leipzig alone, the costs for "care assistance" have risen by 300 percent within five years. Particularly in eastern Germany, fewer and fewer people are able to pay their share of the costs. "It simply cannot be that the social welfare office becomes the standard source of funding for care."

Higher Contributions for the Insured?

Currently, long-term care insurance provides only partial coverage: costs for a nursing home place are covered proportionally depending on the level of care required. According to a recent analysis by the Association of Substitute Health Funds (VDEK), nursing home residents paid an average of 3,364 euros per month out of pocket during their first year, based on a nationwide average. Comprehensive insurance would cover these costs in full. Critics warn that such a system would lead to massive increases in contributions for both employees and employers.

Chancellor Friedrich Merz (CDU) announced in July that reform of long-term care insurance would be placed on the agenda in autumn. With the Care Reorganization Act, the Health Ministry aims to stabilize the finances of long-term care insurance in order to cover billion-euro shortfalls and avoid across-the-board contribution increases — a plan underpinned by a package of spending cuts.

Care costs are rising due to factors including higher staffing and operating costs, inflation, and an increasing number of people in need of care, which has now surpassed six million. The draft legislation was introduced by then-Health Minister Nina Warken (CDU); the ministry is now led by Carsten Linnemann (CDU). Warken had spoken out against comprehensive care insurance.