LTCcovid Country Profiles

Responses to 1.03. Long-term care financing arrangements and coverage

The LTCcovid International Living report is a “wiki-style” report addressing 68 questions on characteristics of Long-Term Care (LTC) systems, impacts of COVID-19 on LTC, measures adopted to mitigate these impacts and new reforms countries are adopting to address structural problems in LTC systems and to improved preparedness for future events. It was compiled and updated voluntarily by experts on LTC all over the world. Members of the Social Care COVID-19 Resilience and Recovery project moderated the entries and edited as needed. It was updated regularly until the end of 2022.

The report can be read by question/topic (below) or by country: COVID-19 and Long-Term Care country profiles.

To cite this report (please note the date in which it was consulted as the contents changes over time):

Comas-Herrera A, Marczak J, Byrd W, Lorenz-Dant K, Patel D, Pharoah D (eds.) and LTCcovid contributors.  (2022) LTCcovid International living report on COVID-19 and Long-Term Care. LTCcovid, Care Policy & Evaluation Centre, London School of Economics and Political Science. https://doi.org/10.21953/lse.mlre15e0u6s6

Copyright is with the LTCCovid and Care Policy and Evaluation Centre, LSE.

 

About this question

This page contains the answers for question 1.03. Long-Term Care financing arrangements and coverage in the LTCcovid International Living Report on COVID-19 Long-Term Care. This report is updated and expanded over time, as experts on long-term care add new contributions.

Overview

Introduction

Financing refers to mechanisms that are used to raise funds (or resources) for long-term care, and to allocate those resources to particular groups or individuals. LTC financing discussions tend to focus on the sustainability of current financing arrangements, given rapidly growing demand due to population ageing and the predicted increase in the frail older people with long-term care needs.

Reliance on unpaid care and its impact on LTC financing arrangements

In practice, the largest share of LTC across the world is provided as an “in kind” resource, by unpaid carers such as family members and friends (see section 1.11 of this report for more details on unpaid carers).  Family carers in some countries, for example Denmark, can be paid by the government for short periods of time. Informal carers may also receive income transfers and, possibly, some payments from the person receiving care. In Low and Middle Income Countries there is little availability of formal care and, while expenditure measured as a share of GDP appears relatively low, families bear very substantial costs of care with little support (see for example, Govia et al. 2021).

Universal LTC coverage

Systems with universal LTC coverage tend to provide publicly funded nursing and personal care to all individuals assessed as eligible due to their care-dependency status. They may apply primarily to the older population (e.g. in Japan, Korea), or to all people with assessed care-need regardless of the age-group (e.g. the Netherlands). Universal coverage systems are mostly found in Europe, particularly the Nordic countries such as Sweden, Finland, Denmark although in those countries provision/access often depends on local area and municipal availability of services.

Means-tested LTC systems

Means-tested systems operate in such countries as England, US as well as in many Eastern European countries where free LTC services are available for people with greatest needs and with lowest financial needs, although some services may be universal, needs tested (e.g. such as reablement in England). In some countries co-payments have been introduced, which are either means-tested e.g. in parts of Canada, Japan, France. The rate of co-payments is often means-tested and can vary from 10% to 90%, although it can be a set amount as in parts of Canada.

LTC insurance

Some countries have mandatory LTC insurance which provides a universal coverage (namely Germany, Japan, South Korea). In the United States private LTC insurance is the only means of sharing risk of high costs of care among people who are not covered by the public means-tested system. Private LTC insurance is also used to “top-up” public care benefits, for example in France and Germany.

Drivers of LTC spending

Expenditure on LTC is driven by a range of factors that relate to both demand (e.g. population size and structure, health status, individual and national income) and supply of LTC services (policy/institutional settings, technological advance) (source: The 2021 Ageing Report).  Differences in social values may also influence the level of public LTC spending as well as the distribution of support, for example, between users with and without informal carers. Moreover, in most OECD countries, the drive towards community-based care translates to higher public coverage of home-based rather than inpatient LTC.

Overview of LTC expenditure

Estimating LTC financing accurately and robustly is very difficult as very few countries have information systems that record all out-of-pocket spending on long-term care services. However, based on the available data, in most countries long-term care expenditure represents a small share of Gross Domestic Product (GDP). In 2017 total spending on public LTC across OECD countries, was estimated to account for 1.5% of GDP or 730 American dollars (USD) per capita (after adjusting for differences in price levels). This ranged from less than 0.2% of GDP in Greece, and the Slovak Republic to a high of around 4% of GDP in the Netherlands, 3% in Sweden and 2.5% in Denmark. In the US and Republic of Korea the spending was about 1% of GDP, in Canada 1.5%, followed by Germany (2.2%) and the UK and France (2.5% in each).

Countries with the highest LTC spending overall i.e. Sweden and the Netherlands – are also nations where the public share of LTC financing is the highest (at 92-93%). On average across the OECD in 2017, 76% of inpatient LTC was financed by public schemes compared to 91% for home-based care, the gap was widest in Austria, Korea and the United Kingdom, where there was a 30-percentage point difference or more.

References:

Govia, I.; Robinson, J.N.; Amour, R.; Stubbs, M.; Lorenz-Dant, K.; Comas Herrera, A.; Knapp, M. (2021). ‘Mapping Long-Term Care in Jamaica: Addressing an Ageing Population. Sustainability  13, 8101. https://
doi.org/10.3390/su13148101

International reports and sources

WHO sources:

WHO’s Report (2021) Pricing long-term care for older persons;  includes case studies on Australia, France, Germany, Japan, Republic of Korea, the Netherlands, Spain, Sweden and the USA

WHO (2015) Aging and Health report (who.int)

OECD sources

OECD (2020). LTC-Spending-Estimates-under-the-Joint-Health-Accounts-Questionnaire.pdf (oecd.org);

OECD (2020). The effectiveness of social protection for long-term care in old age;

OECD (2011) Public Long-term Care Financing Arrangements in OECD Countries. Help Wanted

EU publications

Several reports can be found about LTC financing and coverage across EU Member States:

Joint Report on Health Care and Long-Term Care Systems and Fiscal Sustainability – Country Documents 2019 Update

2021 Long-term care in the EU. Volume 1 and Volume 2 (country reports)

Other sources

https://www.degruyter.com/Aging in Europe.

Long-Term Care Financing mechanisms

Australia has universal public health care through Medicare. The Australian government subsidizes aged care services so anyone who received aged care is eligible for financial support. In 2018-2019, $27.0 billion was spent on aged care, $19.9 billion of which came from the Australian Government (Royal Commission, 2020a).

Reliance on unpaid carers

There is significant reliance on unpaid (mostly family) carers in the community, to reduce the need for formal care. In 2018, there were around 428,500 unpaid primary carers providing support to someone aged 65 years or older (sources: health.gov; Care, Dignity and Respect report; Parliament of Australia; myagedcare.gov).

Family carers have access to shared care planning tools. Professional carers are also increasingly asked to collaborate with family carers, providing skills training and directing family carers to the services available for them (source: OECD).

Public Long-Term Care coverage:

In Australia 80 per cent of older people will access some form of government funded aged care service before death (2012-2014) (AIHW, 2018).

In 2019-20, over one million people received support from aged care services, around 840,000 used the Commonwealth Home Support Programme, and around 245,000 people lived in residential aged care facilities at some point during the year (AIHW, 2021).

Co-payments

People who use aged care are expected to contribute in the form of co-payments and means tested fees. People receiving aged care services contributed $5.6 billion to the cost of their aged care in 2018–2019 (Royal Commission, 2020a)

Aged care homes are subsidised by the Australian government. The subsidies are paid directly to the aged care home and the amount of funding that a home receives is based on an assessment of individual needs by the home using a tool called the Aged Care Funding Instrument (ACFI) and how much an individual can afford to contribute to the cost of their care and accommodation (using a means assessment).

Access to publicly funded aged care

Aged care services are rationed and access is determined by where people live, their needs, and availability of services. The Royal Commission into Aged Care Quality and Safety highlighted that in practice there is no universal entitlement to aged care as services are strictly rationed and access is determined by where people live, their needs, and availability of services (Royal Commission, 2020b).

Public spending on Long-Term Care

In 2019-20 government spending on LTC in Australia was estimated to be $21.5 billion, 65% on residential aged care and the remainder on home care and support or other forms of care.  This is equivalent to 1.2% of Gross Domestic Product (Treasury, 2021)

References:

Australian Institute of Health and Welfare (2018) Cause of death patterns and people’s use of aged care: A Pathway in Aged Care analysis of 2012–14 death statistics. Cat. no. AGE 83. Canberra: AIHW.

Australian Institute of Health and Welfare (2021) GEN Aged Care Data https://www.gen-agedcaredata.gov.au

Deloitte Access Economics (2020) Commonwealth Home Support Programme Data Study. Department of Health, Australia. https://www.health.gov.au/sites/default/files/documents/2021/06/commonwealth-home-support-programme-data-study_0.pdf

Royal Commission into Aged Care Quality and Safety (2020a) Financing Aged Care, consultation paper 2. Commonwealth of Australia. https://agedcare.royalcommission.gov.au/sites/default/files/2020-06/consultation_paper_2_-_financing_aged_care_0.pdf

Royal Commission into Aged Care Quality and Safety (2020b) Aged care and COVID-19: a special report. Commonwealth of Australia. https://agedcare.royalcommission.gov.au/sites/default/files/2020-12/aged-care-and-covid-19-a-special-report.pdf 

Treasury (2021) 2021 Intergenerational Report. Australian Government. https://treasury.gov.au/publication/2021-intergenerational-report

Last updated: February 9th, 2022

In 2016 public spending on LTC represented 1.9% of Gross Domestic Product (European Commission, 2018).  Long-term care is financed in Austria through a combination of public-sector taxed- based support and out-of-pocket payments by care users. The responsibility for long-term care financing is divided amongst the federal government and the federal states. The federal government is responsible for funding the long-term care allowance (Pflegegeld) and various measures for supporting informal carers, while the federal states cover benefits in-kind (i.e. care services) and are responsible for financing social assistance when a care user cannot cover their costs of care.  Although the federal states are in charge of in-kind services and social assistance, as the federal government is responsible for collecting taxes, the federal government provides transfers to the federal states to cover these costs through the general fiscal equalisation scheme and the long-term care funds (Pflegefonds) (Fink, 2018).  Since 2011, there is a LTC fund (“Pflegefonds”) for the federal government to redistribute to the states and municipalities to help cover home care and nursing home services, as well as palliative and hospice care (Bachner et al., 2018).

The long-term care allowance (Pflegegeld) is a key aspect of the Austrian long-term care system, with over 467,000 beneficiaries in 2020 amounting to €2.71 billion (source: http://www.statistik.at/web_de/statistiken/menschen_und_gesellschaft/soziales/sozialleistungen_auf_bundesebene/bundespflegegeld/index.html). The care allowance is intended to be a contribution towards the cost of care to cover care-related expenses, whether it be formal care services, either privately or publicly provided, or to cover informal care (i.e. routed wage) provided by relatives. Care allowance beneficiaries may use the allowance however they see fit, with no oversight/control on how the allowance is used. The allowance consists of seven levels, characterized by the number of hours needed per month for home help and personal and nursing-related care tasks. To receive the care allowance, the recipient must fulfill several requirements: 1) be in need of support and help for more than 6 months because of a physiological, cognitive or mental health impairment or an impairment of the senses and 2) need support for at least 65 hours per month. To obtain the care allowance, the recipient must first submit a claim to the pension insurance institution before being visited by a certified doctor or nurse who assess their needs regarding (instrumental) activities of daily living. The federal government also finances support for informal carers, through a number of avenues. In 2016, support for informal care amounted to €72.8 million, primarily covering the social insurance of informal carers (€49.2 million), followed by for respite care (€11 million), for care leave (€10.7 million) and finally for quality assurance (€1.9 million) (Schrank, 2017).

In 2019, gross expenditure on LTC services amounted to €4.2 billion, primarily covered by the federal states and municipalities (59%), followed by out-of-pocket pockets by care users and their families (36%) and the rest (5%) from other sources (i.e. contributions by health insurances). Approximately 84% of this went towards (semi-)residential care facilities, and the rest towards mobile care services (16%) (source: http://www.statistik.at/web_de/statistiken/menschen_und_gesellschaft/soziales/sozialleistungen_auf_landesebene/betreuungs_und_pflegedienste/index.html).

 

References:

Bachner, F. et al. (2018), ‘Austria. Health System Review’ Health Systems in Transition, Vol. 20, No.3. European Health Observatory. Accessed at: HiT-20-3-2018-eng.pdf (who.int)

European Commission (2018), ‘The 2018 Ageing Report. Economic & Budgetary Projections for the 28 EU Member States (2016-2070)’. Luxembourg: Publications Office of the European Union

Fink, M. (2018). ‘ESPN Thematic Report on Challenges in long-term care. Austria’. Brussels, https://ec.europa.eu/social/BlobServlet?docId=19837&langId=en

Schrank, S. (2017), ‘Reforms in long-term care: The Austrian long-term care system : Current challenges and reforms’. Accessed at: European Centre for Social Welfare Policy and Research

Last updated: February 2nd, 2022   Contributors: Cassandra Simmons  |  

In 2016 public spending on long-term care was estimated to represent 2.3% of Gross Domestic Product (European Commission, 2018).

Long-term care is part of an integrated system of health care, complemented by social service provision. Medical care is financed by the federal health insurance system, whereas personal care is organized and financed by the regional governments. Cash benefits only play a small role in the system. Co-payments are means-tested and subject to a maximum limit. Additionally, Flanders has a compulsory social insurance system specifically for non-medical help services that provides cash benefits to people with reduced self-sufficiency (European Commission, 2019).

References:

European Commission (2018), ‘The 2018 Ageing Report. Economic & Budgetary Projections for the 28 EU Member States (2016-2070)’. Luxembourg: Publications Office of the European Union

European Commission (2019), Austria Health Care & Long-Term Care Systems. An excerpt from the Joint Report on Health Care and Long-Term Care Systems & Fiscal Sustainability

Last updated: February 3rd, 2022

Some public LTC services are provided through the Unified Social Assistance System, this is means-tested and targeted to people without family support, and increasing availability of private care options (source: https://ltccovid.org/wp-content/uploads/2020/05/COVID-19-Long-term-care-situation-in-Brazil-6-May-2020.pdf).

Last updated: November 23rd, 2021

In 2016 public LTC represented 0.4% of Gross Domestic Product in Bulgaria (European Commission, 2018). People in need of care are covered by social assistance, which is managed at municipal level and by disability benefits (e.g. as a supplement to pensions for older people). The country was reported in need to develop governance, financing and regulatory framework for LTC (European Commission, 2019).

 

References:

European Commission (2018), ‘The 2018 Ageing Report. Economic & Budgetary Projections for the 28 EU Member States (2016-2070)’. Luxembourg: Publications Office of the European Union

European Commission (2019), Bulgaria Health Care & Long-Term Care Systems. An excerpt from the Joint Report on Health Care and Long-Term Care Systems & Fiscal Sustainability

Last updated: February 3rd, 2022

In total, LTC services in British Columbia  cost $2 billion CAD per year, with the majority, $1.3 billion CAD, spent in the contracted sector (source: https://www.seniorsadvocatebc.ca/app/uploads/sites/4/2020/02/ABillionReasonsToCare.pdf).

LTC services are available through publicly subsidized and privately funded services. Some publicly subsidized home and community care services are provided free of charge. For example, British Columbia has the highest recommended funded hours per resident day at 3.36 hours, higher than the Canadian average of 3.30. For other services, the cost is shared between the Ministry of Health and the person receiving services. The amount paid by individuals receiving care is called the client rate. Client rates are determined by BC’s health authorities and may be calculated based on income or set as a fixed rate, depending on the type of care received. For most LTC facilities, the person receiving care pays up to 80% of their income taxation and can also apply for a reduced rate due to financial hardship (source: https://www2.gov.bc.ca/gov/content/health/accessing-health-care/home-community-care/who-pays-for-care; https://rsc-src.ca/sites/default/files/LTC%20PB%20%2B%20ES_EN_0.pdf).

Unpaid carers (commonly referred to as family caregivers in Canada) are represented by the Family Caregivers of British Columbia (FCBC), a provincial non-profit. FCBC represents over 1 million people in British Columbia. Although there is no data yet on how many family caregivers are present in the province. FCBC provides access to information and education and acts as a voice for family caregivers when liaising with other stakeholders in the health and social sector (source: https://www.familycaregiversbc.ca/).

LTC residents and individuals receiving continuous care in the community are charged a portion of their after-tax income. Individuals may apply for a reduction in rates due to financial hardship. For the most part, anyone requiring care should be able to receive it (source: https://www2.gov.bc.ca/gov/content/health/accessing-health-care/home-community-care/who-pays-for-care).

Last updated: February 11th, 2022

Public LTC expenditure in Cyprus was estimated to represent 0.3% of the Gross Domestic Product (source: European Commission: The 2018 Ageing Report).

Last updated: February 10th, 2022

Public LTC expenditure in the Czech Republic was estimated to represent 1.3% of Gross Domestic Product (European Commission, 2018). Some LTC services such as home care are covered by the health insurance system (if indicated by a general practitioner). Institutional care costs are mostly paid by out-of-pocket payments (European Commission, 2019).

References:

European Commission (2018), ‘The 2018 Ageing Report. Economic & Budgetary Projections for the 28 EU Member States (2016-2070)’. Luxembourg: Publications Office of the European Union

European Commission (2019), Czech Republic Health Care & Long-Term Care Systems. An excerpt from the Joint Report on Health Care and Long-Term Care Systems & Fiscal Sustainability

Sowa-Kofta, A., Wija, P. (2017). Czech Republic: Emerging policy developments in long-term care. CEQUA country report

Last updated: February 15th, 2022

Public sending on Long-Term Care as % of Gross Domestic Product (GDP):

In 2016 Denmark spent 3.5% of GDP on publicly funded LTC which places Denmark along with other Nordic countries and the Netherlands in the group of highest spenders (OECD average 1.5%). Also the per capita spending is relatively high around USD 2.000 per person 65+ (OECD, 2020).

Since the late 2000s the average expenditure per person 65+ in the municipalities has fluctuated somewhat but overall tends to decrease, reflecting both the general increase in functional ability but most likely also the change to reablement and consequent cuts in home care. In 2007 municipalities on average spent DKK 44.667 (6.119 Euro) per person 65+ and by 2017 the budgeted amount is DKK 41.315 (5.659 Euro). (Source: Økonomi- og Indenrigsministeriets Kommunale Nøgletal, nd. http://www.noegletal.dk/noegletal/servlet/nctrlman.aReqManager)

Approach to public funding for LTC and eligibility:

Municipalities are responsible for allocating resources; they obtain funding from the national government, local taxes and equalization money from other municipalities. There are no co-payments for home-based care services such as cleaning and personal care, although individuals who use private providers can buy additional services. Also home nursing services are free of charge.

In nursing homes, residents pay for rent, medication, laundry and for the use of ser-vices, up to a max. ceiling of 10-20 % of income depending on the municipality. Resi-dents do, however, not pay for what can be considered home help services, including help with domestic tasks and personal care, as this is free of charge. The resident maintains his or her pension and financial means. It is possible to receive rent subsidy. Nevertheless, the rent can be considerable. There are no figures over the average rent or service fee across the various nursing homes in the country, but in Copenhagen municipality the prices for monthly rent varies from 4-8.000 DKK (550-900 Euro) monthly (http://boligertilaeldre.kk.dk/). National accounts are made for the cost of food only, which is on average 3.473 DKK (475 Euro) monthly (Økonomi- og Indenrigsministeriets Kommunale Nøgletal, n.d.)

Eligibility for LTC is based purely on needs assessment carried out by the municipalities, principle of free and equal access applies, regardless of income, wealth, age or household situation.. There are no thresholds or minimum dependence required for in-kind or cash benefits. Needs assessment is multidimensional and captures a wide range of aspects related to a person’s situation and well-being (WHO, 2019).

It has been estimated that 16% of the total population provided unpaid care at least once a week in 2016 (WHO, 2019). The availability, or not, of informal care is not considered as a criterion for assessing needs and entitlements. However, members of the household are expected to provide cleaning. In comparison with other countries, unpaid carers experience less burden and are less likely to report difficulties in reconciling work and caregiving compared with the rest of the EU (Rodrigues at al., 2013). In recent years, the pressure of financing and recruiting staff has led to more pplitical voicing of the need for informal carers to provide more care, most recently expressed by the Minister in charge in the preparation of the new Senior Citizens’ Act.

References:

Rodrigues, R., Schulmann, K., Schmidt, A., Kalavrezou, N. & Matsaganis, M. (2013). The indirect costs of long-term care. European Centre for Social Welfare Policy: Research Note.

WHO (2019), ‘Denmark: Country case study on the integrated delivery of long-term care’. Accessed at: https://www.euro.who.int/2019/denmark-country-case-study-on-the-integrated-delivery-of-long-term-care-2019).

Økonomi- og Indenrigsministeriets Kommunale Nøgletal (n.d) http://www.noegletal.dk/

Last updated: May 24th, 2023

In 2016, public LTC expenditure in Estonia was estimated to represent 9.9% of Gross Domestic Product (source: European Commission: The 2018 Ageing Report).

Last updated: February 10th, 2022

LTC services are part of the universal health and social care system in Finland. The state government and municipalities are the major funders of LTC care, however despite most costs being covered by taxes, there are user fees. For example, in 2014, older people using care services paid 18.5% of the costs of care (source: http://urn.fi/URN:ISBN:978-952-302-236-2). User fees are defined by the ability to pay.

Unpaid care from families is a major part of the LTC system, and it is argued that reforms of the care system in the past 30 years have resulted in increased reliance on families, who have been provided with support through cash-for care schemes (Ylinen et al., 2021).

According to the European Union’s Ageing report 2021, public LTC expenditure in Finland represented 2.0% of Gross Domestic Product in 2019.

References:

Ylinen, T., Ylinen, V., Kalliomaa-Puha, L. Ylinen, S. (2021), ‘Governmental response to the COVID-19 pandemic in Long-Term Care residences for older people: preparedness, responses and challenges for the future: Finland’, MC COVID-19 working paper 04/2021. http://dx.doi.org/10.20350/digitalCSIC/13692

Last updated: February 10th, 2022

LTC funding is fragmented and divided across a complex web of actors. Costs are shared between: local authorities, national health insurance (CNAM), not-for-profit (mutuelles) and private insurance policies, National Solidarity Fund for Autonomy (CNSA), central government, pensions, municipalities and individuals.  

In 2014, €30 billion (1.4% of GDP) were spent on policies around long-term care for older people’, of which 80% were state funds. Of this: 

  • €12.2 billion were from health spending (of which €12.2 billion were from health and solidarity insurance funds, and €0.1billion were from household co-payments and top-ups) 
  • €10.7 billion were from social care spending (of which €3.3 billion were from health and solidarity insurance funds, €4.4 billion from local authorities, €2.1 billion from household co-payments and top-ups, €0.5 billion directly from the state, and €0.3 billion from complementing organisations) 
  • €7.1 billion were from housing spending (of which €0.2 billion were from health and solidarity insurance funds, €1.2billion were from local authorities, €3.8 billion were from household co-payments and top-ups, and €1.9 billion were directly from the state). 

The National Solidarity Fund for Autonomy (CNSA) was created following the 2003 heatwave to create protections around dependency and autonomy and is managed by local authorities. It is funded through allocation transfers from the health insurance fund (CNAM) and a tax on capital income and a solidarity contribution for employers and employees. The Act on adapting society to an ageing population (Loi d’adaptation de la société au vieillissement, 2015) introduced an 0.3% contribution through the solidarity fund for autonomy (CNSA) on the pensions of people with an annual income of above 13,956€ (21,408€ for couples) (see Le Bihan 2016, download here). Following the creation of a fifth LTC pillar for as a part of the French social security system in 2020, the CNSA becomes the lead agency for managing this risk.   

This major reform of the financing of the French LTC system had been overdue long before the pandemic, delayed in part as a result of disagreements over financing of the system (see Le Bihan 2016, download here). There has been a long-standing ambition since the 1990s to create a fifth pillar to social security around autonomy and long-term care (see Le Bihan, 2018, download here). The 2019 Libault reform, which set out ambitions plans for reform for which costs would rise to €9.2billion by 2030, promised legislation by end-2019. Options outlined for financing included drawing on existing social debt and introducing mandatory contributions on pay. Due to existing very high levels of taxation on income, drawing on existing social debt and depending on existing taxation was the favoured option. However, the outcome of the yellow jacket (“gilet jaune”) movement and the outbreak of the Covid pandemic led to this reform to be postponed (source). Finally, the Law on social debt and autonomy from August 7th 2020 created the long awaited fifth pillar aimed at financing LTC.   

A market for private insurance for long-term care has developed as contributions are tax-free and is reported to be one of the largest in Europe. Take up is still relatively low, with around 3-5 million insurance policies and unattractive contracts with contributions of €300-500 per month for people with high levels of need (source).  

France’s main policy for older people is a cash-for-care scheme called the Allocation Personalisée à l’Autonomie (APA), which provides some assistance to people over 60 with care needs above a government determined threshold of need (AGGIR 1-6) and is concerned mostly with homecare. In 2020, 53% of the 780,000 people who receive the APA lived at home.1 It is estimated that 2 million people will be eligible to benefit from APA by 2030 (see Le Bihan, 2018, download here). In 2015 there were 1.25M beneficiaries?of the personal autonomy allowance for people over 60 in need of assistance with activities of daily living (8% of over-60s). 

APA is means-tested based on taxable income and some assets (excluding property) (source). Individuals below the lower income threshold of €800 per month do not contribute to the costs of their care. People over the upper income threshold of €2,945 contribute 90% of the costs of their care. The level of the allowance also depends on the need level. ? 

People under 60 or still in employment past 60, in need of support with activities of daily living as a result of disability are entitled to financial support for care services (full compensation if yearly income is under threshold of €27,000 or 80% of cost if over threshold) under the Prestation de Compensation du Handicap (PCH). There were 314,755 people (adults and children) benefitting from the PCH in 2018. 

The average out-of-pocket payment for people drawing on domiciliary care is €60 per month. In residential and nursing care, the average out-of-pocket payment is €1,850 per month (for accommodation), and exceeds the means of more than 75% of people (source). 20% of people in a residential or nursing home are able to benefit from means-tested support for housing (Aide sociale à l’hébergement). The other 55% of people for whom the residential care or nursing costs exceed their income depend on financial support from families or releasing equity from their assets.   

Last updated: October 22nd, 2024   Contributors: Camille Oung  |  Alis Sopadzhiyan  |  

Financing

The social LTC insurance is financed through equal contributions between employer and employees. Childless people pay a slightly higher contribution rate than those with children (3.30% of gross wages versus 3.05%) (Lückenbach et al., 2021). Retirees contribute between 3.05% and 3.30% of their pensions (Milstein, Mueller & Lorenzoni, 2021, p.83).

Financing of private compulsory LTC insurance is risk- rather than income-related, with premiums depending on health status and age. However, caps are in place to prohibit that maximum contribution rates exceed those of the social LTC insurance. As with the social LTC insurance, employers co-pay up to half of the insurance premium (Milstein, Mueller & Lorenzoni, 2021, pp. 83-84).

Coverage of the population

The Long-Term Care Insurance in Germany is statutory. It requires enrollees in both statutory sickness funds and private health insurance to also be enrolled in LTCI funds (Milstein, Mueller & Lorenzoni, 2021).

The provision of LTC insurance is needs- but not means-tested (Milstein, Mueller & Lorenzoni, 2021).  People with LTC needs receive an assessment in which their care needs are classified into five grades. Grade 1 reflects lower needs, while grade 5 represents severe needs. The assignment for the overall grades is based on the assessment of six core areas: mobility, cognitive and communicative abilities, behaviour and psychological issues, ability to take care for oneself independently, handling of illness and therapy as well as illness related strain, and therapy and organisation of everyday life and of social contacts. The grade of support provided varies between the different levels of care need (Nadash, Doty & von Schwanenflügel, 2018).

Coverage of costs

The LTC insurance is designed to cover only a share of the LTC-related costs. With regards to residential care, people in need of long-term care have to pay up to €2,400 per month out of pocket. This includes costs for food and the resident’s room. Costs vary substantially between the different Länder. While the private share of costs for care in residential care settings amounts to more than €1,000 in Baden-Württemberg, they are less than €450 in Thuringia (Sozialpolitik-aktuell.de, 2020)

Where individuals/families cannot shoulder these costs, this will be covered through social security mechanisms. In 2019, 302,000 long-term care recipients depended on meats-tested social assistance support; most of them (250,000) were living in care homes (Rothgang & Müller, 2021).

References

Eggert, S., Teubner, C., Budnick, A., Gellert, P. & Kuhlmey, A. (2020) Pflegende Angehörige in der COVID-19-Krise: Ergebnisse einer bundesweiten Befragung. Available at: https://www.zqp.de/wp-content/uploads/ZQP-Analyse-Angeh%C3%B6rigeCOVID19.pdf (Accessed 31 January 2022)

Lückenbach, C., Klukas, E., Schmidt, P. H. and Gerlinger, T (2021), ‘Governmental response to the COVID-19 pandemic in Long-Term Care residences for older people: preparedness, responses and challenges for the future: Germany’, MC COVID-19 working paper 06/2021 http://dx.doi.org/10.20350/digitalCSIC/13694 Available at: https://drive.google.com/file/d/1-RDnqErydbuGGNXlM8WaFB2oSTRKStTc/view (Accessed 31 January 2022)

Milstein, R., Mueller, M. & Lorenzoni, L. (2021) Case study – Germany. In WHO Centre for Health Development (?Kobe, Japan)?, Organisation for Economic Co-operation and Development, Barber, Sarah L, van Gool, Kees, Wise, Sarah. et al. (?2021)?. Pricing long-term care for older persons. World Health Organization. https://apps.who.int/iris/handle/10665/344505. License: CC BY-NC-SA 3.0 IGO

Nadash, P., Doty, P. & von Schwanenflügel (2018) ‘The German Long-Term Care Insurance Program: Evolution and Recent Developments’, The Gerontologist, 58(3), pp.588-597. https://doi.org/10.1093/geront/gnx018

Rothgang, H. & Müller, R. (2021) Barmer Pflegereport 2021 – Wirkungen der Pflegereformen und Zukunftstrends. Schriftenreihe zur Gesundheitsanalyse – Band 32. BARMER: Berlin. Available at: https://www.barmer.de/blob/361516/2ad4e5f56c47cb7b7e914190f9fae62f/data/barmer-pflegereport-2021-band-32-bifg.pdf (Accessed 03 February 2022).

Sozialpolitik-aktuell.de (2020) Hohe Eigenanteile bei der Heimpflege – mit erheblichen regionalen Unterschieden. Available at: https://www.sozialpolitik-aktuell.de/files/sozialpolitik-aktuell/_Politikfelder/Gesundheitswesen/Datensammlung/PDF-Dateien/abbVI49_Thema_Monat_02_2020.pdf (Accessed 3 February 2022).

Last updated: February 12th, 2022   Contributors: Klara Lorenz-Dant  |  Thomas Fischer  |  Kerstin Hämel  |  

In 2016 public expenditure on LTC was estimated to represent 0.1% of Gross Domestic Product (source: European Commission: The 2018 Ageing Report).

Last updated: February 10th, 2022

In 2016 public LTC expenditure in Hungary was estimated to represent 0.9% of Gross Domestic Product (source: European Commission: The 2018 Ageing Report).

Last updated: February 10th, 2022

In 2018 total LTC expenditure in Iceland was estimated to represent 1.7% of Gross Domestic Product (source: https://stats.oecd.org/Index.aspx?QueryId=30140).

Last updated: February 10th, 2022

Public funding for LTC is very limited, but there are a few public benefit schemes such as disability benefits and pension schemes that offer modest support. Most formal LTC is paid for through out of pocket payments (source: https://ltccovid.org/wp-content/uploads/2020/05/LTC-COVID-situation-in-India-30th-May.pdf).

Last updated: August 2nd, 2021

In 2016 the total LTC expenditure in Israel was estimated to represent 0.6% of Gross Domestic Product (source: OECD). The National Insurance (NI) is the primary public funder of home-based long-term care services and does so through the Long-Term Care Insurance Program (LTCIP).  LTCIP is income-tested to exclude the highest income earners. As of 2014, the NII subsidizes the care of approximately 160,000 seniors at the cost of NIS 5.31 billion (appx. 1.2 bill GBP). Assisted living (e.g. LTCFs) is primarily funded by the Ministries of Health and of Labour and Social Affairs, and accounts for 14% of publicly-funded LTC services. Complex inpatient care is funded by the health system and accounts for 6% of public LTC funds. Public funds account for 55% of LTC services, with the remaining 45%  privately funded (sources: Taub Centre)

Home care and community-based services are the main LTC service for older people in Israel. At the beginning of 2020, 220,830 individuals (of retirement age) were eligible to receive publicly financed LTC services at home (sources: Tsadok-Rosenbluth et al. 2020; National Insurance Institute of Israel).

There are also geriatric hospitals and sheltered housing facilities, many of which are owned and managed by the coordinated governmental healthcare system via the four non-profit health plans (HP’s). These provide long-term geriatric treatment (including wards for older people with cognitive disabilities) as well as departments for active geriatric care (including complex nursing, hospice, and rehabilitative care) (source: Tsadok-Rosenbluth et al, 2021); they became the primary source for concern and emergency response during the COVID-19 pandemic.

LTC insurance in Israel is universal ,and LTC services are substantially funded by private and out-of-pocket expenditure (45%). In April 2018, as part of the LTC reform, the National Insurance launched a program to entitle home-based unpaid caregivers to long-term care benefits. Made a national policy in August 2019, family members can be paid as caregivers under certain conditions; statistics on the implementation of the policy are unavailable (source: Adva Centre).

References:

Tsadok-Rosenbluth, S, Leibner G, Hovav B, Horowitz G and Brammli-Greenberg S (2020) The impact of COVID-19 on people using and providing Long-Term Care in Israel. Report available at LTCcovid.org, International Long- Term Care Policy Network, CPEC-LSE, 4 May 2020. Retrieved from: Article from ltccovid.org

Tsadok-Rosenbluth, S, et al. (2021). Centralized Management of the Covid-19 Pandemic in Long-Term Care Facilities in Israel. Journal of Long-Term Care, (2021), pp. 92–99. DOI: https://doi.org/10.31389/jltc.75

Last updated: February 11th, 2022   Contributors: Sharona Tsadok-Rosenbluth  |  

In 2020 public Long-Term Care (LTC) expenditure in Italy was estimated to represent 1.9% of Gross Domestic Product; 74.1% of this expenditure is devoted to over 65 people (Fost et al., 2021).  Public expenditure on LTC includes three components: 1) LTC  services to dependent people provided by the public health 2) the social component of LTC  provided by municipalities and  3) attendance allowances. The social component of LTC are generally means-tested, access to services are based on needs-assessment but also on income levels (European Commission, 2016).

The bulk of LTC is provided by unpaid, family carers. Also, a large share of home care is provided by privately employed, primarily migrant care workers. The annual estimated expenditure in this type of household-based care is €17.000 per family. Almost 60% of these care workers are employed totally or partially irregularly, with an annual average estimated expenditure of €11.000 (Fosti, at al., 2021).

Access criteria to LTC services are determined at the regional level (with a high level of heterogeneity) and Local Health Authorities (LHA) can established further criteria. Hence, it is very difficult to establish an overreaching picture of access and affordability for these services. The only major intervention that is subject to nationally established criteria is the companion allowance (CA), a cash transfer given to all those with a very severe disability regardless income or other personal features.

Practically all LTC services are based on co-payments and, given the fact that the coverage rate is relatively low, waiting lists are common, although there are no official data on the size of the phenomenon (European Commission, 2021).

References:

Barbarella F, Casanova G, Chiatti C and Lamura G (2018), ‘Italy: emerging policy developments in the long-term care sector’. CEQUA LTC network report. Retrieved from Italy Country Report

European Commission (2016), ‘Italy – Health Care & Long-Term Care Systems. Excerpt from Joint Report on Health Care and Long-Term Care Systems & Fiscal Sustainability’. Institutional Paper 37, volume 2, country documents. Economic and Financial Affairs, Economic Policy Committee. Retrieved from update_joint-report_it_en.pdf (europa.eu)

European Commission (2021). ‘2021 Long Term Care in the EU’ Joint report prepared by the Social Protection Committee (SPC) and the European Commission (DG Empl). Retrieved from: Publications catalogue – Employment, Social Affairs & Inclusion

Fosti G, Notarnicola E, Perobelli E (2021) Le prospettive per il settore socio-sanitario oltre la pandemia. Rapporto Osservatorio Long Term Care 3. Egea. CERGAS. Università Bocconi. Retrieved from: 2019-2020 report Le prospettive per il sistema socio-sanitario oltre la pandemia.

Ministero dell’Economica e delle Finanze (2021) Le tendenze di medio-lungo periodo del sistema pensionistico e socio sanitario. Rapporto n.22.

Last updated: February 4th, 2022   Contributors: Eleonora Perobelli  |  Elisabetta Notarnicola  |  

Japan has a relatively well-funded system, based on mix of tax, social insurance and individual co-payments. Revenue raising mechanisms are flexible to allow for extra top ups in difficult times. However, the system is under financial pressure due to the fast rise in need as a result of rapid ageing. Its generosity has been reduced over time over affordability concerns (Curry et al. 2018)

On being assessed as needing care by the municipal government, which administers Long-Term Care Insurance system (LTCI), service users are assigned a monthly in-kind budget to spend on care according to their level of need. A care manager meets with the service user to determine the actual menu of services needed. Service users pay a co-payment on accessing services which ranges from 10% for most people to 30% for most affluent. Co-payments are capped at fixed monthly level on a sliding scale according to income. People can opt to buy more care beyond assigned level at 100% cost, but care packages are thought to be generous and few people top up beyond their allocated budget. As mentioned earlier, the re-imbursement for care services from the LTCI does not cover room or board.

Funding for the LTCI systems is raised as follows: 50% is from mandatory insurance contributions from all residents aged 40 and older and the rest is from general taxation, 25% from the national government and 12.5% each from the prefectural and municipal governments. The insurance rates are set by each municipality on the basis of the insured resident’s income levels (Estévez-Abe and Ide 2021b).

References:

Estévez-Abe, M., Hiroo Ide. (2021). “COVID-19 and Japan’s Long-Term Care System.” LTCcovid.org, International Long-Term Care Policy Network, CPEC-LSE, February 27, 2021. Retrieved from: ltccovid.org

Curry, N., Castle-Clarke, S. Hemmings, N. (2018). ‘What can England learn from the long-term care system in Japan?’ Nuffield Trust Research Report. Retrieved from: https://www.nuffieldtrust.org.uk/research/what-can-england-learn-from-the-long-term-care-system-in-japan

Last updated: January 20th, 2023

Public LTC expenditure in Latvia was estimated to represent 0.4% of Gross Domestic Product (source: European Commission: The 2018 Ageing Report). The availability of unpaid carers is considered during assessment for formal provision of home care, consequently, home care is provided mostly for people living alone who have no help from family or close neighbours (Calite-Bordane, 2017).

References:

Calite-Bordane, D. (2017). ‘Latvia: Emerging policy developments in long-term care’. Retrieved from: CEQUA Latvia Country report

Last updated: February 16th, 2022

Public LTC expenditure in Luxembourg was estimated to represent 1.3% of Gross Domestic Product in 2016 (source: European Commission: The 2018 Ageing Report).

Last updated: February 10th, 2022

Public expenditure on LTC as percentage of GDP was estimated to be 3.5% in 2016, more than twice the European Union average of 1.6% (EU Commission, 2018). Seventy five percent of spending is allocated to residential care. Private expenditure on LTC (co-payments and out of pocked payments) is relatively low. However, in residential care, residents have to contribute to their board and accommodation. Co-payments have increased considerably for those with higher incomes. Cash for care has been a recent addition for people receiving community care, but in 2016, only 4.7% of recipients of home care aged 65 and over had a personal budget. Benefits are universal but needs tested. There has been a marked shift over time from institutionalisation to community care, with substantial involvement from patient and client organisations. There has been another more recent shift from collective (state) responsibility to individual responsibility and self-reliance. Involvement of unpaid carers, especially families, is now part of the official policy. This however goes against the widespread view that the state should take responsibility for older people in need of care. It is also recognised that this shifts the burden of care back to women (Bruquetas-Callejo and Böcker, 2021).

References:

EU Commission (2018). The 2018 Ageing Report Economic & Budgetary Projections for the 28 EU Member States (2016-2070)

Bruquetas-Callejo, M., Böcker, A. (2021) Governmental response to the COVID-19 pandemic in Long-Term Care residences for older people: preparedness, responses and challenges for the future MC Covid 19 Working Paper 11/2021 

Last updated: February 1st, 2022

In 2016 public LTC expenditure in Norway was estimated to represent 3.7% of Gross Domestic Product (source: European Commission: The 2018 Ageing Report).

Last updated: February 10th, 2022

Public LTC expenditure in Poland was estimated to represent 0.5% of Gross Domestic Product in 2016 (source: European Commission: The 2018 Ageing Report). Public care for dependent older people is provided through health care sector, which includes cases of dependency or palliative care requiring a range of medical and rehabilitation services, and the social care sector, which includes care for dependent older people who are in a socially difficult situation (i.e. those who live alone, come from dysfunctional families, or are poor). Care for older dependent people is predominantly a family domain in Poland. In most cases, caregivers are family members who – in case of care for older dependent people – receive little or no financial remuneration for the care provided. In wealthier households, family carers may be supported by immigrants employed informally (Golinowska et al. 2017).

References:

Golinowska, S., Sowa-Kofta, A. (2017) ‘The Polish policy landscape. Retrieved from CEQUA: Poland Country Report

Last updated: February 10th, 2022   Contributors: Joanna Marczak  |  Agnieszka Sowa-Kofta  |  

In 2016, public LTC expenditure in Portugal represented an estimated 0.5% of Gross Domestic Product (source: European Commission: The 2018 Ageing Report).

Last updated: February 10th, 2022

Total LTC expenditure in Korea represented 1.0% of Gross Domestic Product (GDP) in 2019 (source: https://stats.oecd.org/Index.aspx?QueryId=30140), of this, expenditure through the public LTC Insurance system accounts for 0.37% of GDP (source: https://www.sciencedirect.com).

A universal, public LTC insurance (LTCI) for the older population was introduced in 2008, and it requires no means-test (The-Long-Term-Care-COVID19-situation-in-South-Korea-7-May-2020.pdf ). Services include institutional and home/community care (COVID_LTC_Report-Final-20-November-2020.pdf).

In terms of eligibility, the intended beneficiaries of the system are all Koreans, it mainly targets older people (age 65+).  In 2018 around 8.8 % of the total older population were covered by LTCI (source: https://www.sciencedirect.com), which comprises 2.7% of older adults living in LTCFs (2018) and 6.2% of older adults in receipt of community based LTC (2018) (source: COVID_LTC_Report-Final-20-November-2020.pdf).

Last updated: November 23rd, 2021

In 2016 public LTC expenditure in Romania represented 0.3% of Gross Domestic Product (source: European Commission: The 2018 Ageing Report).

Last updated: February 10th, 2022

Nursing homes in Singapore fall into three categories: public (~31%), private (~40%) and charitable/ not-for-profit (NFP) (~29%). There are a total of 77 nursing homes and 16,221 beds. Substantial government subsidies and donor funding financially assist most of the public and NFP homes, but they also require co-payment from clients. The Ministry of Health subsidy scheme does not cover private nursing homes, for which direct out-of-pocket expenses must be covered by clients (Udod et al., 2021).

Financing for LTC and support to older adults exists within an overall health-care financing that, in turn, is linked to the way in which social care and pension funding is organized. There are three complementary insurance schemes for disability cover: ElderShield and ElderShield Plus, and CareShield. ElderShield is a severe disability insurance scheme under which all citizens and permanent residents born before 1979 who have a MediSave account are automatically covered from 40 years of age (opt-out is possible). To be eligible for the scheme, individuals must be unable to carry out at least three out of six basic activities of daily living. ElderShield Plus offers higher monthly payouts or payouts for a longer period or a combination of both. CareShield Life is a compulsory insurance policy introduced in 2020 that provides payouts for people who are severely disabled. Everyone born between 1980 and 1990 is enrolled automatically and younger cohorts will be enrolled as they turn 30. Another funding scheme introduced in 2020, ElderFund, provides financial support for low income, severely disabled Singaporeans. Additional subsidies and schemes exist to finance LTC. Some schemes focus on financial support to informal caregivers and home-based care (source: Asian Development Bank).

Last updated: January 11th, 2022

In 2016 public LTC expenditure represented 0.9% of Gross Domestic Product in Slovakia (European Commission, 2018).

References:

European Commission (2018), ‘The 2018 Ageing Report. Economic & Budgetary Projections for the 28 EU Member States (2016-2070)’. Luxembourg: Publications Office of the European Union

Last updated: February 4th, 2022

In 2016 public LTC expenditure represented 0.9% of Gross Domestic Product (European Commission, 2018).

References:

European Commission (2018), ‘The 2018 Ageing Report. Economic & Budgetary Projections for the 28 EU Member States (2016-2070)’. Luxembourg: Publications Office of the European Union

Last updated: February 4th, 2022

In 2016 public LTC expenditure in Spain was estimated to represent 0.9% of Gross Domestic Product (source: European Commission: The 2018 Ageing Report). Spain has a tax-based long-term care financing system, with national eligibility criteria and defined benefits, run at regional level and financed by national, regional and local funding. National funding aims to take into account differences in population need (equalization function).

The Dependency Law includes a specific financing system, which differs from a tax-based system, that establishes the participation of both the public administrations (mainly the General State Administration and the Autonomous Communities) and beneficiaries of the benefits. This is carried out via  means tested co-payment systems (source: Joint-report-health-care-and-long-term-care-systems-and-fiscal-sustainability-2019-update_en). The financing system established in the Dependency Law is based on the existence of three levels of protection:

  1. The minimum level of protection provided, must be paid in full by the General State Administration (AGE). This depends on the number of people who rely on care from others who are receiving a benefit.
  2. The agreed level of protection is based upon the conclusion of the corresponding collaboration agreements between the AGE and the autonomous communities. The financing of the AGE of this level of protection is based on the annual distribution of money, which is distributed among the autonomous communities based upon a series of variables and predefined criteria.
  3. The implementation of the final level of protection is optional for autonomous communities, and they are responsible for its financing.

In a global study, recent calculations estimate that spending on care for people who rely on care from others is around 0.7% of the national GDP, although the improvement in the financing of the system will mean an increase in this amount.

Likewise, the AGE has been financing social security contributions associated with the special agreements that could be signed by non-professional caregivers of people in a situation of dependency. This helps ensure that no additional costs are incurred. It also ensures that non-professional caregivers (the vast majority of whom are women) benefit from this type of agreement, with a view to accruing future pensions (retirement, death and survival).

References:

Zalakain, J. Davey, V. & Suárez-González, A. (2020). ‘The COVID-19 on users of Long-Term Care services in Spain’. LTCcovid, International Long-Term Care Policy Network, CPEC-LSE, 28 May 2020. Retrieved from: LTCcovid-Spain-country-report-28-May-1.pdf

 

Last updated: June 29th, 2022   Contributors: Sara Ulla Díez  |  

Health spending was 3.8% of GDP in 2017, of which 1.6% was accounted for by public health expenditure and 2.2% by other financing. The government finances most social services, while non-profit sector and private donation financing is limited.  Families currently bear most LTC costs.  Residential care homes are financed by the non-profit sector and fees are paid by the resident or covered by charitable donations. In-home nursing care services are financed by out-of-pocket payments (source: Country Diagnostic Study on Long-Term Care in Sri Lanka (adb.org).

Last updated: September 6th, 2021

In 2016, public long-term care (LTC) expenditure represented roughly 3.2% of Gross Domestic Product (GDP) (source: The European Commission).

All care in Sweden is provided on a means-based, not means-tested, basis. About 90% of health and social care is financed by county-council and local authority taxes. Out-of-pocket payments are relatively low, set to a maximum level of 5% of the costs (family/ economic resources are not considered), and the remaining 5% is covered by national taxes (Johansson and Schon, 2017). There is also a ceiling on care fees set by central government: as of 2017, no more than 2068 SEK (209 EUR) per month can be charged for care. This applies to both at-home and institutional care (Schön and Heap, 2018w).

Recently, LTC in Sweden has been affected by financial cutbacks. These have had various negative consequences, including those relating to working conditions for care workers, as they perform their duties in increasingly under-staffed conditions (Johansson and Schon, 2020).

Eligibility for LTC is assessed at municipal level, with no national regulation. The eligibility assessments may be carried out by a general practitioner of a municipal assessor, the municipal Social Board decides on the provision of services based on the assessor’s proposals (Lorenzoni, 2021).

 

References:

Johansson, L. and Schön, P. (2017). Sweden: Country Report. CEQUA: LTC Network. Retrieved from: Sweden Country Report

Johansson L. and Schön, P. (2020), ‘Governmental response to the COVID-19 pandemic in Long-Term Care residences for older people: preparedness, responses and challenges for the future: Sweden’, MC COVID-19 working paper 14/2021. http://dx.doi.org/10.20350/digitalCSIC/13701

Lorenzoni L (2021) Sweden case study in Barber SL, van Gool K, Wise S, Woods M, Or Z, Penneau A et al. Pricing long-term care for older persons. Geneva: World Health Organization, Organisation for Economic Co-operation and Development; 2021. Licence: CC BY-NC-SA 3.0 IGO. https://apps.who.int/iris/bitstream/handle/10665/344505/9789240033771-eng.pdf?sequence=1&isAllowed=y 

Schön, P. and Heap J. (2018) ESPN Thematic Report on Challenges in long-term care. Sweden. European Commission. ESPN Thematic Report on Challenges in long-term careeuropa.euhttps://ec.europa.eu › social › BlobServlet

Last updated: March 6th, 2023   Contributors: Daisy Pharoah  |  

In 2018 LTC expenditure was estimated to represent 2.4% of Gross Domestic Product in Switzerland (source: https://stats.oecd.org/Index.aspx?QueryId=30140).

Last updated: February 10th, 2022

Total public spending on health-related LTC was 1.7 billion in 2012. The Ministry of Public Health is the major source of finance (1.6 billion). Spending by nongovernment organizations (NGOs) on health-related LTC was 70.3 million. Finance from family members is a major source of funding for LTC in Thailand. Government revenue is a source of finance for the Community-Based Long-Term Care Program, under the National Health Security Office (NHSO). But out-of-pocket payments are the main source of funding for LTC in private residential facilities.

References:

Asian Development Bank (2020) Country Diagnostic Study on Long-Term Care in Thailand. ADB.

Last updated: December 17th, 2021

Turkey has a familiarist welfare, placing intergenerational obligations to provide care on family members, but there are concerns about the sustainability of this model. There is growing support from the non-profit sector and other private providers, some of whom receive public funding from provision of services, this support is means and needs-tested (source: The-COVID-19-Long-Term-Care-situation-in-Turkey-1.pdf).

Last updated: November 23rd, 2021

Overview

In 2018, LTC expenditure in the United Kingdom was estimated by the OECD to represent 1.8% of Gross Domestic Product.

Who bears the costs? Unpaid care, formal social care and healthcare and out-of-pocket spending

A large share of the resources that fund long-term care are provided in kind, through the time and effort of unpaid carers. Formal long-term care services in England are funded differently for health care, which is free at the point of use through the National Health Service (NHS) and social care, which is means-tested. Individuals who need care and their families also contribute to the costs of care through purchasing services privately or out-of-pocket payments for services. The Office for National Statistics estimated that, between 2019 and 2020, 36.7% of care home residents paid for their own care privately.  There is strong consensus on the need to reform social care funding and reforms are under way (see question 4.02).

As an illustration of who bears the costs of long-term care in England, it is useful to look at the study by Wittenberg et al., 2019, which found that, in 2015, 42% of the £24.2 billion costs of care of people with dementia were attributable to unpaid care, formal social care services represented another 42% and health care 16%. Out of the £10.2 billion social care costs, £6.2 billion were met by people who use care and their families, and £4.0 by the government. This means that the public sector only funds one third (32.6%) of the costs of dementia, leaving users and families to shoulder the rest of the costs through unpaid care or care fees. The cost of dementia estimates include health care costs that are not strictly “long-term care”, for example diagnostic services and hospitalisations, meaning that the share of public funding for long-term care for people with dementia is even lower than this estimate (Wittenberg et al., 2019).

Eligibility criteria for funded care

Eligibility to publicly funded social care is decided through means-testing, the levels are set nationally. People who exceed a certain level of savings and other assets (e.g. property) have to pay for care themselves. People below lower threshold,  £14,250 in 2022,  do not have to contribute anything towards their care, while people above £23,250 in 2022 have to fund all their social care costs. Between these two thresholds people have to contribute on a sliding scale. The upper threshold has not changed since 2010/11 which taking into account levels of inflation means that it went down in real terms (Bottery et al., 2022).

The distinction between ‘health’ and ‘care’ creates  inequity. A person deemed to have health needs may be able to access social care via the NHS’s continuing healthcare programme (although subject to restrictive eligibility criteria and long waiting times), but someone with personal care needs (e.g. arising from dementia) and no medical requirements is subject to the means test (source: Nuffield Trust).

Social care public funding

In England Local Authorities (LAs) organise and fund social care for people who are eligible. The LAs are funded largely through a combination of a grant from central government and local revenue-raising mechanisms, including a tax on housing (council tax). Social care funding is not ring-fenced, which means that local authorities can decide how much of their budget they allocate to care.

The King’s Fund Social Care 360 annual report by Bottery et al., (2022) provides a useful overview on public funding for social care in England. Between 2018/19 and 2019/20, total spending on adult social care increased by 2.2 %. In 2019/20, gross social care spending through LAs was £23.3 billion. Of this, £7.5 billion was spent on long-term support for working-age adults (£2.5 billion on nursing or residential care, £451 million on supported accommodation and £4.6 billion on community support, including home care). They also spent £159 million on short-term support for working-age adults. Spending for long-term support for older people was £7.9 billion (£5 billion on nursing or residential care, £121 million on supported accommodation and £2.7 billion on community support, including home care). They also spent £450 million on short-term support for older people (Bottery et al., 2022).

During the last decade, funding to councils has been cut by almost 50% (source: National Audit Office), which has put pressure on councils to spend less on care either through reducing the rates they pay providers or by reducing the number of people they fund. Because local authorities have a responsibility to raise revenue locally to subsidise the grant they receive from national government, those local authorities in more affluent areas are able to raise more (source: Institute for Fiscal Studies). The result is wide variation in the eligibility for care between local areas, despite the intention of the Care Act (2014) being to standardise eligibility.

References:

Bottery, S., Ward, D. (2022) Social Care 360. The King’s Fund. https://www.kingsfund.org.uk/publications/social-care-360

Wittenberg, R, Knapp, M, Hu, B, et al. (2019) The costs of dementia in England. Int J Geriatr Psychiatry. 34: 1095– 1103. https://doi.org/10.1002/gps.5113

Last updated: March 8th, 2022   Contributors: Joanna Marczak  |  Adelina Comas-Herrera  |  

Principal responsibility for providing services to social care clients falls on Scotland’s 32 local authorities. For home care, each local authority has their own charging policy which, together with a financial assessment of the persons income, will determine how an individual contributes towards their care services. Since 2002, anyone in Scotland aged 65 and over, whether living at home or in a care home is entitled to Free Personal and Nursing Care if they need it.

Before entering a care home, the local authority will carry out needs assessment and a financial assessment to work out what care the individual needs and how much they need to pay towards the care home fees and services. The amount a person will have to pay depends on if they fall above or below the capital limits (lower limit £18,000 and upper limit £28,750 as of April 2021) (Source: Care Information Scotland, Capital limits). Care home residents who have capital above the upper limit are classed as self-funders and those who have capital falling below the lower limit are funded by their local authority. Those whose capital lies in between the upper and lower limits receive some help from the local authority and fund the remainder themselves. However, Free Personal and Nursing Care in a care home means that self-funders who are aged 65+ receive a weekly payment towards their personal care (£193.50 as of 1st April 2021). Any self-funder in need of nursing care will also receive a weekly payment towards the cost of that care (£87.10 as of 1st April 2021). Finally, those who are funded by the local authority will receive personal care for free (Source: Care Information Scotland).

Last updated: March 10th, 2022   Contributors: Jenni Burton  |  David Bell  |  Elizabeth Lemmon  |  David Henderson  |  

In 2018 LTC expenditure represented 0.8% of Gross Domestic Product in the United States (source: https://stats.oecd.org/Index). The financing of LTC in the United States is a continuous and growing challenge. Medicaid is the primary payer for formal LTC services, accounting for over half of national spending in 2017, however it is means-tested: it requires proof of need and exhaustion of individual financial resources (e.g. low-income status and/or limited savings). In 2016, the majority of Medicaid LTC funding was spent on home and community-based services (57%), but several states still apply their Medicaid dollars primarily to institutional care. Coverage and spending on LTC schemes also vary significantly by state (source: Long-term care financing in the US).

Some states fund home and community-based services through Medicaid waivers, and some even allow for self-directed Medicaid funds for payment of informal carers (sources: van Houtven et al. 2020; Vital and Health Statistics). An estimated 7.4 million Americans own private LTC insurance policy (around 15% of persons 65 and over).

References:

Van Houtven, CH., Boucher NA, Dawson WD (2020) The Impact of COVID-19 Outbreak on Long Term Care in the United States. Country report in LTCcovid.org, International Long-Term Care Policy Network, CPEC-LSE, 24th April 2020. Retrieved from: Article from ltccovid.org

Last updated: February 15th, 2022

Given the large number of people in Vietnam in need of social care – a figure that is increasing rapidly – the provision of services is considered inadequate and underfunded (source: UNDP report). The state has a minimally developed LTC system and is heavily reliant on informal care, which is funded by families as out-of-pocket expenses. However, these are unaffordable by many members of the population, and family carers are not entitled to benefits other than in exceptional circumstances (source: Royal Commission into Aged Care Quality and Safety). Furthermore, according to a UNDP report, the majority of working age people in Vietnam do not have a pension to look forward to (with over half of people over age 65 unable to access one); thus, many face income insecurity at an older age and need to work until they are too frail to continue doing so. They may be entitled to social assistance payments, but total state expenditure on these payments is low compared to other middle-income countries (such as Brazil and South Africa), and even some low-income countries (such as Bangladesh). This makes the possibility of purchasing private LTC unlikely for most.

Most of the financial support that does exist is to support those who qualify for institutional care, rather than providing people with support to remain in their homes or with their families. State-funded care is based around a nationwide network of social protection centres, which provide residential accommodation for various vulnerable segments of the population, including some elderly people. There are a total of 393 social protection networks around Vietnam; 180 are run by non-state entities and 213 are publicly run. Thirteen of the social protection centres serve the elderly population. The centres are all financed by the government: the public units are financed directly, and the non-state units are financed indirectly via tariffs paid to the provider, based on what services are delivered. Expenditure is approximately $35 per person per month. A range of weaknesses have been highlighted in these public care centres; mostly due to limited financing, which translates into low-quality standards of accommodation, poor services, an absence of various key services (such as counselling) and difficulties recruiting staff due to low salaries. Furthermore, they are only available to a small segment of the elderly population, leaving many without access to LTC outside of their families (source: UNDP report).

Due to the abovementioned government-funded services failing to meet the increasing demand for LTC in Vietnam, the government provides some incentive payments for volunteer primary caregivers in the community to cover elderly members of the population who are unable to live independently, are poor, and do not family to care for them. In these cases, social assistance payment s are provided to both the recipient of care and caregiver  (source: Royal Commission into Aged Care Quality and Safety).

Last updated: January 3rd, 2022   Contributors: Daisy Pharoah  |  

Contributors to the LTCcovid Living International Report, so far:

Elisa Aguzzoli, Liat Ayalon, David Bell, Shuli Brammli-Greenberg, Erica Breuer, Jorge Browne Salas, Jenni Burton, William Byrd, Sara Charlesworth, Adelina Comas-Herrera, Natasha Curry, Gemma Drou, Stefanie Ettelt, Maria-Aurora Fenech, Thomas Fischer, Nerina Girasol, Chris Hatton, Kerstin Hämel, Nina Hemmings, David Henderson, Kathryn Hinsliff-Smith, Iva Holmerova, Stefania Ilinca, Hongsoo Kim, Margrieta Langins, Shoshana Lauter, Kai Leichsenring, Elizabeth Lemmon, Klara Lorenz-Dant, Lee-Fay Low, Joanna Marczak, Elisabetta Notarnicola, Cian O’Donovan, Camille Oung, Disha Patel, Martina Paulikova, Eleonora Perobelli, Daisy Pharoah, Stacey Rand, Tine Rostgaard, Olafur H. Samuelsson, Maximilien Salcher-Konrad, Benjamin Schlaepfer, Cheng Shi, Cassandra Simmons, Andrea E. Schmidt, Agnieszka Sowa-Kofta, Wendy Taylor, Thordis Hulda Tomasdottir, Sharona Tsadok-Rosenbluth, Sara Ulla Diez, Lisa van Tol, Patrick Alexander Wachholz, Jae Yoon Yi, Jessica J. Yu

This report has built on previous LTCcovid country reports and is supported by the Social Care COVID-19 Resilience and Recovery project, which is funded by the National Institute for Health Research (NIHR) Policy Research Programme (NIHR202333) and by the International Long-Term Care Policy Network and the Care Policy and Evaluation Centre at the London School of Economics and Political Science. The views expressed in this publication are those of the author(s) and not necessarily those of the funders.