German care home costs hit €3,364 a month as Berlin readies reform that may push bills even higher

The cost spiral

A nationwide evaluation by the Verband der Ersatzkassen (vdek) shows that residents in their first year of care now pay an average of €3,364 per month out of pocket. That is €119 more than at the start of 2026 and €256 above the figure recorded on 1 July 2025. The pure care component alone crossed the €2,000 threshold for the first time, reaching €2,088, while accommodation and meals added another €1,086 on average.

There was catching up to do, and it is right that care workers are well paid. But it cannot be that this leads to ever greater burdens on those in need of care.

Regional divides

Costs vary sharply across the federal states. Bremen is the most expensive, with an average monthly burden of €3,761 in the first year, while Saxony-Anhalt is the cheapest at €2,891. In Bavaria the figure stands at €3,270, a jump of €176 compared with July 2025. Thuringia recorded €3,163, roughly €250 more than a year earlier. Since January 2020 the national average has climbed by €1,301.

The roughly 108,300 care home residents in Bavaria are up to their necks in water. In the past two years alone, the out-of-pocket costs in the first twelve months after moving in have shot up by around 16 percent despite increased subsidies.

What is driving the increases

Personnel costs are the main engine. Since 2022, homes can only sign contracts with care insurers if they pay staff according to collective agreements or equivalent scales. The vdek notes that care-worker wages have risen faster than the sector average and now exceed it. Accommodation and food costs have also risen, adding €50 per month compared with mid-2025.

Warken's reform package

Health Minister Nina Warken (CDU) wants to push the Pflegeneuordnungsgesetz (PNOG) through cabinet before the summer break, with the last possible dates being 22 and 29 July. The long-term care insurance system faces a deficit of €7.6 billion in 2027, equivalent to 10 percent of 2025 revenues. The actual stabilisation need, including financial buffers, reaches €11.3 billion.

Warken's draft keeps the general contribution rate at 3.6 percent but raises the assessment ceiling, makes mini-jobs subject to contributions, restricts free co-insurance of partners, and reduces pension contributions for family carers. On the spending side, the relief supplements that reduce the care-related co-payment according to length of stay will be stretched: the 75 percent top-up will now only apply after four and a half years instead of three, with each step extended from 12 to 18 months. This alone is expected to save the care funds €2.6 billion next year. The draft also proposes suspending the mandatory collective-bargaining pay requirement for four years.

Her predecessors in office, Jens Spahn (CDU) and Karl Lauterbach (SPD), built in dangerous cost drivers in home care that, without defusing, will lead to the collapse of the care insurance system.

What happens next

Ulrike Elsner of the vdek insists the reform must achieve a fair distribution of burdens and balanced co-payments. Eugen Brysch of the Deutsche Stiftung Patientenschutz is calling on state governments to fully cover investment and training costs, arguing this would relieve stationary care expenses immediately. With the Bundestag already in recess, the cabinet meetings on 22 and 29 July are the last windows for Warken to secure ministerial approval before the autumn legislative push.