Germany’s social long-term care insurance system is facing a severe financial crisis, prompting urgent calls for reform from leading social welfare organizations. The Diakonie Deutschland and the German Evangelical Association for Elderly Care and Nursing (DEVAP) issued a joint warning on Monday, revealing that the system narrowly avoided a deficit in 2025 only through a €3.2 billion state loan.
Without this financial intervention, the care insurance fund would have recorded a loss of €2.8 billion, according to the organizations. “Care must not impoverish people,” stated Elke Ronneberger, Federal Director of Social Policy at Diakonie Deutschland, demanding that the federal government secure reliable long-term funding for the system.
The organizations are advocating for a series of measures to stabilize the insurance scheme. These include the repayment of funds used to manage the COVID-19 pandemic, increasing financial contributions from higher earners by raising the insurance contribution ceiling, and the eventual implementation of a universal care insurance system encompassing all segments of the population. DEVAP has also been actively seeking a response from Chancellor Merz and Vice-Chancellor Klingbeil regarding comprehensive reform proposals, having initially contacted them with an open letter on November 20, 2025, but has yet to receive a reply, according to a statement released on March 10, 2026.
A key proposal gaining traction is the “Sockel-Spitze-Tausch” (base-peak exchange) model. This would establish a fixed maximum contribution for individuals requiring care, with the insurance fund covering all remaining costs. Anna Leonhardi, a board member of DEVAP, emphasized that this model would “ensure a permanent limitation of care-related out-of-pocket expenses, create genuine predictability, and thus deliver on the core promise of a genuine care reform.” She argued that individuals who have contributed to the system throughout their lives deserve clarity regarding their maximum financial burden in the event of needing care.
The Sockel-Spitze-Tausch model is supported by economic analysis. Health economist Heinz Rothgang contends that the model can stabilize out-of-pocket expenses without excessively burdening the insurance system. Rothgang stated that the exchange would “permanently limit care-related out-of-pocket expenses and the proportion of nursing home residents dependent on social assistance.” He further suggested that these increased costs could be financed without raising contribution rates by incorporating additional income sources, increasing the contribution assessment ceiling, and establishing a financial equalization mechanism between statutory and private care insurance.
Diakonie and DEVAP are urging the federal government to reach a sustainable compromise during the planned care reform. They warn that short-term, minimal solutions could erode public trust in the social security system and the government’s ability to act decisively. DEVAP recently participated in a committee meeting of the Württembergischen on March 12, 2026, discussing these issues.
The organizations’ concerns come as the Bund-Länder-Kommission (Federal-State Commission) prepares to present an interim report on care reform. DEVAP and Diakonie cautioned on October 13, 2025, that a reform discussion lacking a solid financial basis would be unproductive.
