Are long-term care insurance contributions going to rise in Germany?

Are long-term care insurance contributions going to rise in Germany?

Facing a 2-billion-euro deficit, statutory health insurance companies in Germany are warning that they may be forced to increase contributions for long-term care insurance in 2022, to help cover the climbing cost of care. 

Long-term care premiums could go up by 0,3 percentage points

Public health insurance companies in Germany have called on the federal government to provide financial assistance - otherwise they say they will be left with no choice but to increase premiums for long-term care insurance - a contribution of one’s salary paid by all people working in Germany

“If nothing happens, a premium increase of 0,3 percentage points will be necessary in the first half of the year to secure funding,” deputy chairperson of the board of directors of the National Association of Statutory Insurance Funds, Gernot Kiefer, told the Rheinische Post. Based on an average monthly income of 3.000 euros, that would amount to approximately 108 euros extra per person, per year - a sum which is split equally between the employer and the employee. 

Big budget deficit for long-term care insurance in Germany

Kiefer explained that the public health insurance funds had ended 2021 with a budget deficit of 2 billion euros. “This means that long-term care insurance starts the new year on a knife edge, because the deficit could only just barely be offset by the reserves,” Kiefer said. 

Not only that, but plans are already in place that will significantly increase expenditure in 2022. For instance, nurses are due to receive a pay hike this year - a move that on its own will cost an additional 5 billion euros per year. 

With the statutory health insurance companies’ financial reserves now down to the statutory minimum level, Kiefer called for political action to stabilise the financial situation. The government has been asked to make a decision in the first half of 2022. 

Long-term care insurance was introduced in Germany in 1994 as the fifth pillar of the social security system. Contribution rates have been periodically increased since its introduction, most recently in 2019, when the rate rose to 3,05 percent of annual income, or 3,3 percent for people without children. In 2022, the rate is due to increase by 0,1 percent for childless people only. 



Abi Carter

Abi studied History & German at the University of Manchester. She has since worked as a writer, editor and content marketeer, but still has a soft spot for museums, castles...

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