The black-red coalition has agreed on a draft law on care reforms, which is primarily focused on savings.
Germany’s squabbling coalition government struck a deal Wednesday on a major overhaul of long-term care insurance, a crucial but politically sensitive issue in the rapidly ageing country.
The agreement on the outlines of the reforms is a major win for embattled conservative Chancellor Friedrich Merz, whose CDU party recently suffered disastrous regional election results.
Cabinet ministers approved the draft proposal from Health Minister Carsten Linnemann — a close Merz ally — “without amendments”, according to the government press office.
Some politicians in the centre-left Social Democrats (SPD), Merz’s junior coalition partner, had in recent days attacked the proposal, saying it relied on cost-cutting and benefit reductions to shore up the finances of the programme.
The open bickering with Merz’s conservative CDU/CSU bloc reignited speculation on the future of the coalition and the chancellor, who is facing record-low popularity ratings.
Statutory long-term care insurance — a mandatory part of Germany’s social security system — is already running a massive deficit and is expected to see costs skyrocket as the elderly make up a growing share of the population.
People at Germany’s retirement age of 67 or older already account for one-fifth of the population, according to the latest official statistics, a share forecast to rise to one quarter by 2035.
Without reform, the deficit in the long-term care insurance programme would exceed 15 billion euros by 2028, according to government spokesman Stefan Kornelius.
Linnemann said the system is “under massive financial pressure” and must “achieve savings”, as the number of people covered by the scheme has tripled to 20 million over two decades.
But the minister denied that his reforms amounted to an “austerity plan”, noting that the taxes used to finance the scheme would remain steady for most workers, although childless individuals and high-earners will pay more.
Linnemann also said his proposed legislation would create an expert commission to present a report on how to make the long-term care sector “structurally fit”.
Several leading German economic think tanks have recently urged the government not to delay the promised reform package.
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