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The German Social Long-Term Care Insurance: Structure and Reform Options

Author

Listed:
  • Arntz, Melanie

    () (ZEW Mannheim)

  • Sacchetto, Ralf

    () (ZEW Mannheim)

  • Spermann, Alexander

    () (University of Freiburg)

  • Steffes, Susanne

    () (ZEW Mannheim)

  • Widmaier, Sarah

    () (ZEW Mannheim)

Abstract

Regarding social needs in Germany long-term care is an important issue due to an ageing population. Shrinking social networks are leading to a greater need for a public long-term care system. In 1995 the social long-term care insurance was introduced in Germany. In recent years some drawbacks of the social long-term care insurance structure turned out to be in need of reform: While health insurance is a fully comprehensive system, long-term care insurance only provides limited cover. Therefore, insurance funds have an incentive to shift some services from health care to long-term care insurance. Additionally, there is no free competition on the long-term care market because care packages included in the in-kind transfers are negotiated (with respect to services and prices) between insurance funds and professional care providers. Finally, the financial situation of the German social long-term care insurance is tight. While in the first years after introduction the net results of revenues and expenditures were positive they have been negative since 1999 which is due to an increasing number of benefit recipients. Therefore, we discuss several reform options which have been proposed in order to overcome the financial and structural problems. Suggestions for the income side include the introduction of fixed premiums, a fully funded system, a private insurance, or a citizens’ insurance. The introduction of individual budgets is the most popular option for the outcome side. A social experiment is under way in order to evaluate the impact of so-called matching transfers.

Suggested Citation

  • Arntz, Melanie & Sacchetto, Ralf & Spermann, Alexander & Steffes, Susanne & Widmaier, Sarah, 2007. "The German Social Long-Term Care Insurance: Structure and Reform Options," IZA Discussion Papers 2625, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2625
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    References listed on IDEAS

    as
    1. Donges, Juergen B. & Eekhoff, Johann & Franz, Wolfgang & Fuest, Clemens & Möschel, Wernhard & Neumann, Manfred J. M., 2005. "Tragfähige Pflegeversicherung," Kronberger Kreis-Studien 42, Stiftung Marktwirtschaft / The Market Economy Foundation, Berlin.
    2. Häcker, Jasmin & Höfer, Max A. & Raffelhüschen, Bernd, 2004. "Wie kann die Gesetzliche Pflegeversicherung nachhaltig reformiert werden?," Discussion Papers 119, Albert-Ludwigs-Universität Freiburg, Institut für Finanzwissenschaft.
    3. Jasmin Häcker & Bernd Raffelhüschen, 2004. "Denn sie wussten, was sie taten: zur Reform der Sozialen Pflegeversicherung," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 73(1), pages 158-174.
    4. Ottnad, Adrian, 2003. "Pflegeversicherung - Last Exit," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW – German National Library of Economics / Leibniz Information Centre for Economics, vol. 83(12), pages 777-785.
    5. Spermann, Alexander & Arntz, Melanie, 2003. "Wie lässt sich die gesetzliche Pflegeversicherung mit Hilfe personengebundener Budgets reformieren?," ZEW Discussion Papers 03-58, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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    Cited by:

    1. Rhee, Jong Chul & Done, Nicolae & Anderson, Gerard F., 2015. "Considering long-term care insurance for middle-income countries: comparing South Korea with Japan and Germany," Health Policy, Elsevier, vol. 119(10), pages 1319-1329.
    2. Martín Caruso & Sebastian Galiani & Pablo Ibarrarán, 2017. "Long-Term Care in Latin America and the Caribbean? Theory and Policy Considerations," NBER Working Papers 23797, National Bureau of Economic Research, Inc.
    3. Annamaria Simonazzi, 2009. "Care regimes and national employment models," Cambridge Journal of Economics, Oxford University Press, vol. 33(2), pages 211-232, March.
    4. Heinicke, Katrin & Thomsen, Stephan L., 2010. "The social long-term care insurance in Germany: origin, situation, threats, and perspectives," ZEW Discussion Papers 10-012, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

    More about this item

    Keywords

    long-term care; cash transfers; in-kind transfers; social experiments;

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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