Working Paper: NBER ID: w31870
Authors: Johannes Geyer; Axel H. Börsch-Supan; Peter Haan; Elsa Perdrix
Abstract: This chapter provides an overview of the German long-term care insurance. We document care needs and wellbeing of the elderly population. Moreover, we provide a detailed description of the German long-term care institutions (sources of finance and types of benefits), the professional care work force, and informal caregivers. Finally, we document expenditures on long-term care and estimate the value of informal care. The cost of long-term care for the elderly (65+), including both cost of nursing home and home health agency, reached 61 billion euro in 2019. Half of these spending are for nursing homes while only about 22.5% of beneficiaries use these institutions. Out-of-pocket spending differs greatly between modes of care. Out-of-pocket expenditures make up only about 7% of total expenditures for home care. In nursing homes, 41% of expenditures are out-of-pocket payment. Most of the expenditures are covered by the long-term care insurance. The share of other governmental schemes in expenditures for inpatient care is relatively high. This is explained by a high rate of benefit recipients who cannot afford co-payments for nursing homes: about one-third of all nursing home residents receive means- and wealth-tested social assistance. If we add the costs of informal care the share of privately financed care amounts to nearly 60% of total expenditures.
Keywords: Long-term care; Elderly care; Germany; Care needs; Welfare state
JEL Codes: H51; I13; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| age (J14) | demand for long-term care (J20) |
| age-related limitations in daily activities (ADLs) (J14) | demand for long-term care (J20) |
| increase in life expectancy and low fertility rates (J11) | demographic shift towards an older population (J11) |
| demographic shift towards an older population (J11) | increase in demand for long-term care services (J20) |
| increasing age of the population (J11) | necessity for reforms in long-term care system (J14) |
| increasing employment rates and later retirement ages (J26) | declining availability of informal caregivers (J26) |