German Cities Association Backs Full Care Vollversicherung as Government Plans Autumn Pflegereform

The Quick Take

• Germany's Städtetag calls for converting long-term care insurance to full Vollversicherung covering all care costs, not just partial coverage
• The federal government plans to introduce Pflegereform legislation in autumn 2026 to structurally overhaul the €60-plus billion care insurance system
• Full coverage would end the risk of poverty from care costs for workers who contributed to the system throughout their careers

Germany's national cities association, the Städtetag, has formally backed converting the country's long-term care insurance system to a Vollversicherung — full coverage — in advance of planned federal reform legislation expected in autumn 2026. The current Pflegeversicherung provides only partial coverage of care costs, leaving significant out-of-pocket exposure for patients in residential care facilities. The Städtetag's stated rationale is social equity: workers who paid into the system throughout their careers should not face poverty-level decisions over accessing care. The reform lobby has unusual cross-partisan support given the demographic urgency — Germany's aging population is rapidly expanding the care-dependent cohort.

For the financial sector, a Vollversicherung conversion carries bilateral implications. German private insurers face both risk and opportunity: if state Vollversicherung creates a benchmark coverage floor, private top-up products for premium care become more clearly defined and potentially easier to market. Conversely, if the reform expands state coverage to encompass currently privately insured care levels, premium volume could contract. The contribution rate restructuring required to fund Vollversicherung is the primary fiscal uncertainty — higher Sozialabgaben (social contributions) would increase labour costs for German employers, touching competitiveness directly. Medical device and pharmaceutical companies supplying the German care market would see structural demand expansion under broader coverage.

The reform path faces significant friction. Germany's governing coalition has competing fiscal consolidation commitments that a Vollversicherung expansion would strain without dedicated funding mechanisms. The Bundestag arithmetic will depend on whether the coalition framing positions this as a structural investment or a spending expansion. Private insurer lobbying through GDV is expected to focus on hybrid public-private models that preserve premium insurance market functionality rather than a pure state expansion. Investors in German healthcare and insurance equities should monitor the autumn legislative calendar for the specific bill text, which will define coverage limits, funding mechanisms, and effective dates.

Synthesized from 3 sources.