Long-term Care Insurance in Germany Assessments, benefits, care arrangements and funding

The establishment of Long-term Care Insurance (LTCI) in Germany in 1995/96 significantly restructured Germany's public long-term care support. Before, the responsibility for providing care to Germany's elderly population lay mainly with the family, while based on the principle of subsidiarity public support was only available after a means-test within a tax-based social assistance framework. The law on LTCI established a social-insurance and mandatory private insurance scheme to grant universal public support in strictly defined situations of care dependency. LTCI in Germany was created at the beginning of the 1990s in a situation of welfare state constraints characterised by criticism towards comprehensive public welfare spending and an increasing emphasis on individual responsibilities and market solutions (Landenberger, 1994; Meyer, 1996). Against this background the law was a compromise on the balance of private, family, public and market responsibilities between more economically - and more social-policy oriented politicians and social actors. The LTCI law aimed to combine several goals, namely the introduction of universal social rights, cost containment strategies, the promotion of ageing in place, with an emphasis on family care, and the expansion of a market-oriented care infrastructure (Theobald, 2011, forthcoming). The goals are reflected in the definition of social rights valid in the whole country, the construction of funding schemes and the regulation of family care-giving and professional care provision based on free choice for users between both types of care provision and care providers. Prevalent benefit use and care arrangement patterns emerging within the framework of LTCI still confirm a family-oriented strategy of long-term care provision mainly supported by cash payments. However, a more detailed analysis of current care arrangements reveals considerable differences in the interplay of family care, professional care provision and further paid care services depending on gender, socio-economic class and migration background. Furthermore, the development of a market-oriented care infrastructure based on price competition resulted in considerable regional differences, which run counter to the goal of the insurance to provide equal support in defined situations of care dependency throughout the country. Public long-term care support is embedded and simultaneously limited by mode and principles of funding; i.e. the introduction of a separated social- and private insurance scheme and cost containment strategies. The basic presumptions surrounding the two distinct schemes on the role of state respectively public, market or private responsibilities are the subject matter of continual discussions. The paper aims to give a broad overview of social rights, benefits, modes and principles of LTCI funding and an analysis of outcomes related to patterns of care provision and the financial development of this insurance. First, the interrelationship of LTCI with other valid policy schemes in the sector provide a background for the analysis and are outlined to reveal the position of LTCI and further available public support. Second, the basic features of LTCI are presented (sections 2 and 3). The paper goes on to describe and explain assessment procedures, benefit use, prevalent care arrangements patterns, and the situation of informal carers against the background of LTCI (sections 4 and 5). Funding schemes are presented and discussed with regard to their financial development and difficulties, alternative funding concepts and processes of policy-making with their political and social actors (section 6). Finally, LTCI features and their outcomes related to care provision and funding are summarised and discussed in the conclusion (section 7).