Karl Lauterbach and his nursing reform: Will it work?

The situation is tense, so much so that the Minister of Health is speaking out personally. “The nursing care insurance is not insolvent,” said Karl Lauterbach on Monday, “it is not threatened with insolvency either.” Those in need of care and relatives could continue to rely on the long-term care insurance to pay for the care and cover the services.

The fact that a health minister has to say these sentences at all shows the drama of the situation. The statement was preceded by a report from the editorial network Germany, according to which the nursing care insurance was threatened with insolvency and that the traffic light was working on an “emergency operation” to avert this.

The minister denies this, but one thing is clear: nursing care insurance is under enormous pressure. The population is aging, contributions are rising, as are the expenses that those in need of care have to pay for a place in a home. However, income is weakening, also because of the economic situation.

Karl Lauterbach was initially skeptical

Experts have been warning about the worsening situation for years, but politicians have not really addressed the problem. It didn’t initially look like this for Lauterbach either: after an initial care reform, in which, among other things, the contribution rates increased, he hoped to get it through the legislature. Probably a wrong assumption. According to his own statements, he is now working on a “major care reform”.

The minister has so far remained silent on details, but his hints make it clear that it is about a fundamental reform of financing. It’s about “who pays what,” said Lauterbach on Monday: about the development of contributions, about the home costs for those in need of care, about “fully comprehensive insurance elements, yes or no”.

The only problem is: it takes a lot of imagination to imagine the coalition partners agreeing on something that would really help. There are only a few adjustment screws – and the ideas of the SPD, Greens and FDP differ widely.

The minister even admitted this publicly in May. At that time, a commission working on proposals for financial reform was nearing completion. Lauterbach said: “A comprehensive financial reform in care will probably no longer be possible in this legislative period.” He predicted that there would be no uniform recommendation from the commission (and that is what happened), as “the views of the various ministries and coalition partners are too different.”

Ideas in the coalition are far apart

In the meantime, the pressure has continued to increase because more people than expected needed care and the economic situation remains tense. Would Finance Minister Christian Lindner from the FDP therefore agree to a higher tax subsidy given the current budget situation? Almost impossible. Or a citizen’s insurance that includes privately insured people? Just as unlikely – even if the Health Minister supports this and the SPD and the Greens have been calling for it for years.

The traffic light factions are now eagerly awaiting the minister’s proposals. So far there is not enough imagination to imagine what could be agreed upon. Because after admitting that the situation is tense and changes are needed, the unity stops.

“With demographic change, the number of contributors is falling, while the need for care is increasing – a financial gap that cannot be closed without reforms,” ​​said the FDP parliamentary group’s care policy spokesman, Jens Teutrine, to the star. For him it is clear that contributions should not increase any further: “After years of inflation, decreasing the net from the gross cannot be the right way.”

The FDP is therefore offering a “reform for more capital coverage in long-term care insurance”, and it is also about “equal treatment of company long-term care provision and company pensions” and “improvements in private provision”. At the same time, the contribution money needs to be managed more specifically and better, said Teutrine.

The Greens, on the other hand, have more tax resources as a solution. The deputy parliamentary group leader Maria Klein-Schmeink said this star: “In the coalition agreement, we agreed that tasks for society as a whole – such as the pension rights of caring relatives – should also be supported by tax resources.”

This is an important step to relieve the burden on long-term care insurance, but at the same time we have to “face the reality that care is becoming more and more expensive.” Therefore, contribution increases are “inevitable,” said Klein-Schmeink. “However, these must be designed in a socially just manner so that they do not place undue burden on anyone.”

The fronts have hardened. Meanwhile, there is harsh criticism from the opposition. “Every day that Lauterbach is less in office is good for people’s wallets and health,” said the chairman of the CDU workers’ wing, Dennis Radtke star. “Small and medium incomes will again be the big losers if social security contributions rise significantly.” According to the media report, the federal government now assumes that contributions will have to increase at the beginning of 2025 by more than previously assumed: by 0.25 to 0.3 percentage points.

Radtke therefore calls for those with high incomes to pay more contributions and criticizes the FDP’s blockade on the issue: “While long-term care insurance is on the verge of bankruptcy, Federal Finance Minister Christian Lindner is blocking the adjustment of the contribution assessment limit.” This is an “important first step in including higher earners in solidarity financing.”

Is this an adjustment that Lauterbach also has in mind? The Minister of Health is still leaving this open. He wants to present his plans in “a few weeks”. But time is slowly running out. There is probably no way around the fact that contributions will rise again at the beginning of 2025.