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The Intergenerational Impact of Long-term Care Financing Alternatives in Spain

  • Joan Costa-Font
  • Concepcio Patxot

This paper examines the financial sustainability of long-term care funding options in Spain. We employ the generational accounting ("GA") methodology to evaluate the intertemporal impact of funding policies for long-term care services in the face of demographic change. Our findings suggest first that, although at present the system seems actuarially fair, the resources currently employed will be clearly insufficient to fund future needs, due to the demographic dependency of expenditures; second, that the specific tax instrument used to fund long-term care plays a less significant role. Conversely, the role of co-payment turns out to be key in offsetting the adverse effect of demography on the finances of the system. Copyright 2004 The International Association for the Study of Insurance Economics.

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Article provided by The International Association for the Study of Insurance Economics in its journal The Geneva Papers.

Volume (Year): 29 (2004)
Issue (Month): 4 (October)
Pages: 599-619

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Handle: RePEc:bla:geneva:v:29:y:2004:i:4:p:599-619
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