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Economist Veronika Grimm and the federal-state working group led by Federal Health Minister Nina Warken have proposed a reevaluation of benefit provisions in social security systems, with a primary focus on long-term care insurance. The aim is to ensure the financial sustainability of these systems by reducing public benefits for those who have the means to self-finance.
Grimm advocates for increased transparency about the affordability limits of public social insurance benefits in pension, healthcare, and long-term care sectors. Potential reductions in long-term care benefits are on the table to maintain financial balance. Grimm also rejects the idea of full public coverage in long-term care insurance, instead encouraging those with financial capacity to bear part of the care costs.
The federal-state working group is also expected to formulate comprehensive welfare and social security reforms by the end of the year. These reforms will be part of a broader coalition strategy, balancing financial sustainability with social protection.
Grimm emphasizes that social security reform requires more than just benefit cuts for fiscal balance. She also advocates for regulatory simplifications and tax reforms to foster economic growth, which would underpin sustainable social system financing, particularly in the long-term care insurance system.
Working group proposals for long-term care insurance reform are currently being developed. Grimm warns that rising ancillary labor costs, currently at 42% and projected to reach 45% by the end of the legislative period, are making employment unattractive and impacting system financing. She suggests that those who can finance parts of care services should do so.
Grimm also warns against making promises that might not be kept. She states that honesty is needed in pension, long-term care, and health insurance systems about which benefits can be afforded. No new mention of Grimm's stance on full coverage in long-term care has been made.
The federal cabinet has recently introduced broader pension reforms focused on securing stable pension levels until 2031, enhancing benefits for mothers, and modest contribution increases for both employers and employees starting 2027, partially financed by tax revenues. However, these reforms do not seem to be directly related to the long-term care insurance system.
In summary, the key reform thrusts advocated by Grimm and indicated by the working group include prudent benefit reassessment with some cuts for affordability, encouraging private responsibility in care costs, contribution adjustments, and structural economic reforms to sustain social security financing, particularly targeting the long-term care insurance system.
The economic and social policy proposed by Grimm and the working group includes a reevaluation of long-term care insurance and a focus on sustainable financing, encompassing prudent benefit cuts, private responsibility in care costs, and structural economic reforms, such as regulatory simplifications and tax reforms to foster growth. Grimm also stresses the need for transparency in long-term care, healthcare, and pension sectors, advocating honesty about affordable benefits and urging individuals to finance parts of care services if they can.
