In view of the demographic trend already evident when nursing care insurance was introduced, this form of social insurance should never have been placed on a pay-as-you-go footing. However, correcting such historical errors is difficult. The first generation of beneficiaries more or less received a gift as they had not been obliged to make any notable contributions towards funding the system. This gift would have to be taken back if there were to be a switch to a fully funded system. This would mean benefits being financed heavily from tax revenue. With the federal budget strapped for cash, we regard this option as unlikely.
Nursing care insurance in need of therapy
In the current political framework, supplementary funding is likely to be the most realistic option. This needs to be set up in such a way that it will be able to cope with the inevitable rise in costs as a result of the ageing process, the need to dynamize benefits and the inclusion of the mentally ill. Raising the pay-as-you go share needs to be avoided at all costs.
A dramatic rise in spending on care is unavoidable. The goal of policymakers must be to ensure that the burden is distributed as fairly as possible between the generations and not to undermine Germany’s competitiveness by pushing labor costs up further. However the revamped nursing care insurance turns out, it will be measured in these terms.
Christian Schulte
Dr. Jürgen Stanowsky