Home care costs remain high, prompting calls for alleviation - Rising home care costs trigger calls for financial relief
In Germany, nursing home care costs have witnessed a steady increase in 2025, following a similar trend in previous years. The average monthly cost for a nursing home resident in Saxony, for instance, has risen from €2,664 to €2,854, although it remains below the national average of €3,108 per month[1]. Costs vary significantly across federal states, with Bremen and North Rhine-Westphalia having the highest costs (€3,449 and €3,427, respectively), while Saxony-Anhalt and Mecklenburg-Western Pomerania are the least expensive (€2,595 and €2,752)[1]. These figures account for the statutory long-term care insurance (Pflegeversicherung) contribution, implying that the out-of-pocket burden on residents and families can still be substantial.
The primary drivers behind these rising costs include staffing shortages, increased demand, wage increases, and investment and modernization efforts[2][3]. The lack of specialist care staff drives up labor costs, contributing to higher care fees. The number of people in need of care in Germany continues to grow rapidly, with Berlin alone seeing an almost doubling since 2013 to over 210,000[2]. Wage increases, such as the July 2025 rise in statutory minimum wages for qualified nurses and nursing assistants, have also played a significant role[4]. Furthermore, investment and modernization in healthcare real estate often involve higher management and modernization costs, which can be passed on to residents.
Current policy approaches aim to address these challenges through several means. For instance, there is a growing focus on supporting family caregivers through advice, training, and respite services[2]. Preventative home visits and information campaigns targeting those over 70 are also being implemented to delay or prevent the need for institutional care[2]. In Berlin, dozens of care support points have been established to provide advice on home safety, fall prevention, and accessing support services[2]. Pension increases, such as the 3.74% increase in 2025, provide some relief for care-dependent individuals and their families, although this may also push some pensioners into taxable income brackets[4].
The investment market for care homes is experiencing a boom, with transaction volumes significantly increasing[3]. However, much of this activity focuses on properties requiring significant management or modernization, rather than new, high-quality facilities. There is also strong international investor interest in the German care sector, particularly in larger portfolios and outpatient care properties, suggesting further market evolution and potential for increased supply[3].
Future reforms are likely to centre on addressing staffing shortages, financial sustainability, and the quality and availability of both home-based and institutional care[5]. This includes proposals to improve pay, training, and working conditions for care workers, adjust contribution rates for long-term care insurance, and increase funding and support for home-based care to reduce reliance on expensive institutional care. Preventative care programs aimed at helping seniors remain independent and out of institutional care for as long as possible are also expected to be scaled up. Additionally, there is a focus on encouraging the development of modern care facilities, possibly through public-private partnerships.
In conclusion, rising nursing home care costs in Germany reflect broader demographic, labor market, and investment trends. Current policy responses emphasize supporting home care and family caregivers, preventing care dependency where possible, and adjusting social security benefits. However, comprehensive solutions will require further reforms to address staffing shortages, financial sustainability, and the quality and availability of both home-based and institutional care. The interplay between public policy, market forces, and demographic change will shape the future of care for Germany’s aging population.
[1] - Analysis based on remuneration agreements between care insurance companies and nursing homes in all federal states, including the Techniker Krankenkasse, the Barmer, and the DAK-Gesundheit. [2] - Source: Berlin Senate Department for Health, Seniors, Care and Equality [3] - Source: German Real Estate Federation (ZIA) [4] - Source: Federal Statistical Office [5] - Based on ongoing discussions within the Joint Federal and State Working Group established to address the issue, with results expected by the end of the year.
- To combat staffing shortages and improve the quality of care in the nursing home sector, future policy reforms might prioritize enhancing the pay, training, and working conditions for vocational training in care work.
- In the realm of health-and-wellness and mental-health, preventative programs aimed at keeping seniors independent and delaying institutional care are anticipated to be expanded, part of a strategy to reduce nursing home care costs.
- As part of the general-news and politics landscape, there is a growing focus on financing sustained home-based care to minimize reliance on expensive institutional care, all while maintaining the financial sustainability of long-term care insurance.
- In line with the trends in science and fitness-and-exercise, the investment market for care homes is increasing, with the potential for new, high-quality facilities through public-private partnerships, modernizing and improving the care landscape for Germany's aging population.
