German care insurance faces 4.4 billion euro deficit as funds deplete in October

Acute shortfall in care insurance

Germany's statutory long-term care insurance will deplete its liquid funds by October 2026, creating an estimated 500 million euro shortfall by the end of the year. The National Association of Statutory Health Insurance Funds (GKV-Spitzenverband) presented its financial forecast on Monday, 31 August 2026. The projected full-year deficit stands at 1.2 billion euros, even after accounting for a 3.2 billion euro federal loan granted as an emergency measure. Without the loan, the total underlying deficit for 2026 reaches 4.4 billion euros. GKV board chairman Oliver Blatt stated that expenditures are rising almost three times faster than revenue. For 2027, the association projects an uncovered funding requirement of 10 billion euros, comprising an expected 7.5 billion euro structural deficit alongside necessary liquidity reserves.

If politicians do not turn the helm around soon, we will have a blatant problem.

Cost divergence and demographic pressure

In the first half of 2026, care insurance spending increased by 11% year-on-year to 39.5 billion euros, while contribution revenue grew by 3.9% to 36.7 billion euros. Total half-year revenues reached 38.7 billion euros, an amount that already includes the first 1.6 billion euro installment of the federal loan. Full-year spending is on track to approach 80 billion euros, compared with 31 billion euros in 2016. The primary factor driving this expenditure growth is the rising volume of recipients. Approximately six million people now receive long-term care benefits, an increase of 370,000 individuals or 6.5% compared with the previous year. Around 85% of recipients, roughly 5.2 million people, receive outpatient care in their homes. The overall number of beneficiaries has doubled since 2017, when eligibility criteria were expanded by legislative reform.

Demands on the federal budget

To stabilize the funds in the short term, the GKV-Spitzenverband called on the federal government to reimburse 5.2 billion euros in pandemic-related costs. During the coronavirus pandemic, care funds covered non-insurance expenses including tests in nursing homes, protective equipment, and bonus payments for staff that were only partially reimbursed from tax revenue. The association also urged the federal government to assume pension contributions for family caregivers as a general societal responsibility rather than funding them through insurance contributions. In inpatient facilities, monthly out-of-pocket costs for residents currently average well over 3,000 euros during their first year. The GKV noted that if federal states took over nursing home investment costs, it would immediately lower co-payments for residents by about 500 euros per month.

Reform timetable and recipient protection

Despite the projected liquidity depletion in October, the association clarified that care benefits will remain protected and payments to beneficiaries will not be halted. If statutory funds run out of cash, the Federal Social Security Office (BAS) can inject emergency liquidity into the equalization fund. Federal Health Minister Carsten Linnemann plans to introduce a draft care reform package to the federal cabinet in September 2026. The initiative follows an earlier reform draft presented in June by former health minister Nina Warken, who has since moved to the Federal Chancellery. The statutory care system represents nearly 75 million insured citizens across Germany.

Care cannot go bankrupt.