German Care Reform Reduces Wage Subsidy for Nursing Facilities

Germany's draft Pflegeneuordnungsgesetz (PNOG) proposes cutting the full tariff‑wage refinancing for hospitals and nursing homes from 100 % to 50 %, meaning that only half of agreed wage increases would be reimbursed by health insurers. The change has drawn sharp criticism from nursing unions, employer groups and the Federal Association of Private Social Service Providers, who warn it could trigger insolvencies and staff cuts.

The reform also addresses a projected deficit of the statutory long‑term‑care insurance, estimating a shortfall of at least €1 billion this year and up to €15.4 billion by 2028. Proposals include a dynamized benefit system linked to inflation, a mandatory digital “care cockpit” for insured persons, and new ambulatory care budgets. Critics argue the plan places heavy burdens on care recipients and contributors, especially through higher contribution thresholds and reduced support for caregivers, and call for a broader cost‑sharing approach involving the federal government.