Long-term care insurance: why it is obligatory and what it provides

Long-term care insurance is obligatory both for people with statutory and private health insurance. It was introduced in order to protect as many people as possible in a situation in which they would be in need of care. What exactly does this care insurance provide?

At a glance

  • Long-term care insurance is obligatory for people with statutory and private health insurance.
  • This care insurance covers the costs of care and support services and assistance with housekeeping, for instance.
  • People with private care insurance have their expenses reimbursed, as with private health insurance.
  • The benefits that those concerned receive depends on the care level, for example.
  • Care insurance is not intended to fully protect those in need of care. So people may need to pay their own contributions to fund care services.  
Long term care insurance: elderly woman sitting in a wheelchair and smiling at a young woman sitting opposite her. The young woman is wearing a blue gown and is clearly a caregiver. She is holding the older woman’s right hand in both hands.

Care insurance: what it is and what it provides

Anybody can be in need of care. Care insurance helps protect people against this. The care insurance scheme was introduced in 1995 as a separate branch of social insurance.

Care insurance is obligatory for everyone with statutory and private health insurance. Those with statutory insurance automatically come under the SPV (social care insurance scheme). People with private health insurance must get PPV (obligatory private care insurance).

In essence, care insurance provides these benefits:

  • non-cash care benefits, particularly for making use of care services
  • money for care assistance the person has procured themselves
  • a combination of cash and non-cash benefits
  • care in the home if the prime carer is unavailable
  • care aids and measures to improve the home environment
  • daytime care and nighttime care
  • respite care (short term care in residential facilities)
  • residential care
  • additional support and activation in residential care facilities
  • benefits relating to social security for carers
  • additional benefits when the carer is on leave or unavailable for a short period
  • care courses for loved ones and voluntary carers
  • additional relief for loved ones who are carers
  • benefits from the Personal Budget as per § 29 of the Ninth Book
  • additional benefits for those in need of care in supported outpatient living groups

The social care insurance scheme is funded by contributions paid, largely in equal measures, by the employer and employee. Who can claim which care insurance benefits depends on a range of factors: how long will the person be in need of care? To what extent does the person depend on care? Which type of care is needed?

To be able to assess the benefits required, a thorough assessment is carried out to determine the care level in each case. There are five care levels in all.

The gradations range from minor impairments to independence or capabilities in care level 1 through to severe impairments accompanied by specific nursing care requirements. The main rules on care insurance are laid down in the Eleventh Book of the German Social Code (SGB, Buch XI).

Under the care insurance scheme, insured persons can themselves decide how they want to be cared for. For example they can choose whether professional carers look after them, or whether they prefer to claim financial payments and give them to loved ones in financial recognition of their care. Above all, the care insurance scheme aims to ensure that those affected are able to lead a self-determined life as far as possible.

Important: In some cases the care insurance does not cover all the costs incurred when someone is in need of care. Those concerned cover the additional costs themselves.

If someone is in need of financial assistance, the social welfare scheme can cover some costs. Because care insurance does not necessarily cover all the costs when someone is in need of care, it is also known as “partial costs insurance”. So individual care provision, for example via a daily allowance insurance or a care expenses supplementary tariff, may be a useful add-on. To encourage people to accept more responsibility, and to enable everyone to take out a private supplementary care insurance policy, people who are interested in private supplementary care insurance have access to insurance products without a health check. The government funds certain private supplementary care insurance policies through a subsidy of 60 euros per year.

Why is care insurance required?

As in many industrialized nations, the average age of the population is increasing in Germany, too. According to estimates from the Federal Statistical Office, by 2040 the number of older people (67 and above) will rise from the current 15.9 million to between 20.9 and 22 million. That would be five to six million, or around one-third more than in 2018. So this trend will result in there being ever more older people, and ever less younger ones. So, ever more people in need of care, too.

Long-term care insurance is needed because the number of people over 67 is predicted to increase to around 21 to 22 million by 2040. That would be around a third more than in 2018.

The likelihood of being in need of care increases with age. Specifically, this means that in the age group from 60 to 65 around 2 percent, from 80 to 85 around 23 percent, from 85 to 90 around 45 percent, and over 90 as much as 71 percent of people are in need of care.

Moreover, the demand for care services is increasing due to changes in family structures: in many families there are few or no children. These are usually working, or they do not live in the same area, and so they cannot easily look after their parents or other family members in need of care.

How many people have care insurance and how many are receiving benefits?

In Germany around 73.47 million people have statutory care insurance, and 9.22 million have private care insurance (as at 31/12/2019). Around 4.25 million people are receiving care insurance benefits. Of these, around 4 million have statutory and some 252,000 have private insurance.

The vast majority of those in need of care receive outpatient care (around 79 percent). Around 21 percent are cared for in a residential care facility.

Who has care insurance?

There is an extensive obligation to have care insurance. The general rule is that most people have care insurance just as they have health insurance. This means that those with statutory health insurance automatically come under the social care insurance scheme. Those with private care insurance are obliged to take out private obligatory care insurance.

People covered by statutory health insurance

The groups of people who automatically have long-term care insurance under the statutory health insurance scheme (GKV) include workers, salaried staff, students and pensioners.

People covered by statutory health insurance do not have to specifically request social care insurance to be covered. Those automatically covered include employed people, students, and pensioners. People who are no longer obliged to have insurance, for example because they have moved to another country, may apply to continue to have social care insurance.

Insured family members

Anyone included under a family insurance policy does not pay any separate care insurance contributions. This is on condition that the overall regular monthly income is no more than 470 euros per month. The income limit changes at the start of every year.

People covered by family insurance are mainly:

  • children entitled to education
  • spouses
  • life partners from a same-sex registered partnership

People with voluntary statutory health insurance

People with voluntary statutory health insurance are also obliged to have social care insurance. However, they can get an exemption from this obligation. This option exists in the first three months of voluntary insurance. If the insured person opts to be exempt, they need to show that they have taken out private care insurance.

People with private health insurance

People with private health insurance must get PPV (obligatory private care insurance). The benefits match those from the social care insurance scheme. However, rather than non-cash benefits, people with private insurance get expenses reimbursed – as is the case with private health insurance.

Obligatory insurance for other groups

People who do not have statutory or private health insurance, but who have another entitlement to protection should they become ill, are also covered by the care insurance system. These include, for example, people who can claim therapy or medical treatment under the Federal Law on War Pensions, or fixed term military personnel.

Option of continued insurance

In certain circumstances people can apply for continued insurance in the social care insurance scheme. This enables people to maintain their insurance protection when they no longer have obligatory insurance. However, this is only possible if they have been a member of the social care insurance scheme for at least 24 months in the preceding five years or uninterruptedly during the preceding twelve months.

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