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Are You Well Prepared for Long-term Care? – Assessing Financial Gaps in Private German Care Provision

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  • Matthias Keese
  • Annika Meng

    ()

  • Reinhold Schnabel

Abstract

The development of expenditure for care services is one of the most intensively debated topics in public. However, studies calculating financial provision gaps only focus on the macro-level implications for the compulsory care insurance. In contrast, this paper examines the individuals’ micro-level perspective. We use survey as well as regional and national statistical data to calculate expected individual costs of long-term care on a very detailed care arrangement and care level basis. Afterwards, we compare these costs with the individuals’ total wealth. In our most conservative policy scenario, our results show that about a third of statutorily insured individuals will have to face a financial care provision gap. Among homeowners, an even higher share will have to liquidate the main residence. The privately insured are affected to a somewhat lower extent. In both groups, the situation will become much more severe if the development of public transfers does not keep up with future increases of long-term care costs. Furthermore, regression analyses show that provision gaps are more frequent among statutorily insured individuals, females, and individuals in single households.

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File URL: http://repec.rwi-essen.de/files/REP_10_203.pdf
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Bibliographic Info

Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0203.

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Length: 29 pages
Date of creation: Sep 2010
Date of revision:
Handle: RePEc:rwi:repape:0203

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Related research

Keywords: Long-term care costs; care prevalence; life expectancy; provision gap;

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