Germany’s Nursing Insurance Faces Record €5.2 Billion Shortfall as Reform Hits Delays

Germany’s long-term care insurance system is heading for a historic financial crisis, with a projected deficit of up to €5.2 billion in 2026, according to the BKK Dachverband, an association representing company health insurers. The warning came as the federal government announced it would postpone cabinet deliberations on the Nursing Reorganisation Act (PNOG) until after the parliamentary summer recess, a decision made public in late July 2026.

The BKK Dachverband reported that nursing care funds saw an 11 percent increase in spending during the first six months of 2026. Without swift legislative action, the full-year deficit could reach record levels, the organisation cautioned. Anne-Kathrin Klemm, a representative of the BKK Dachverband, urged the incoming health minister, Carsten Linnemann, to prioritise the reform. A key demand is that the federal budget, rather than contribution payers, should finance non-insurance-related benefits—such as pension contributions for family members who provide informal care.

Protests Erupt Over Proposed Cuts and Stricter Eligibility

The delay is not the only source of tension. The content of the PNOG itself has drawn sharp criticism from welfare associations and care workers. In late July 2026, protests broke out across Brandenburg. In Frankfurt (Oder), several hundred participants formed a car convoy, while demonstrators gathered in front of the state parliament in Potsdam. Representatives of local welfare organisations warned that planned savings measures and tighter thresholds for assigning care levels could create severe gaps in care provision, particularly in rural areas.

Among the contested proposals are a reduction in pension contributions for caregiving relatives and a slower increase in state subsidies. Andreas Becker of the EVAP rejected the term “reform” for the plan outright. Andreas Kaczynski, representing the League of Free Welfare Care in Brandenburg, argued that demographic trends—with over 6 million people currently in need of care—demand an expansion of services, not cuts. He noted that roughly 80 percent of care rates go directly to personnel costs, meaning meaningful savings could only come from reducing bureaucracy.

Mixed Reactions to Draft Law’s Prevention Focus

Not all responses to the PNOG have been negative. The VPKA, an association of private care providers, welcomed the draft law’s stronger emphasis on prevention and rehabilitation, which was presented in June 2026. However, the group is calling for better access to rehabilitation services and wants rehabilitation facilities to be allowed as training providers for nursing staff.

Meanwhile, Germany’s Federal Ministry of Health is facing questions about possible calculation errors in the PNOG’s projected costs for employees. The legislation proposes adjustments to both the assessment criteria and the threshold values used to determine care needs. Whether the government can stick to its post-recess timeline and how it will address the looming financing gap remain open questions that will dominate policy discussions in the months ahead.

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