LTCcovid Country Profiles

Responses to 4.02. Reforms to the Long-term care financing system

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 is compiled and updated voluntarily by experts on LTC all over the world. Members of the Social Care COVID-19 Resilience and Recovery project are moderating the entries and editing as needed.

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, Pharoah D (eds.) and LTCcovid contributors. 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.

Overview

Belgium, Germany, Estonia, Poland, Romania, and Slovakia introduced changes in the sources, or the conditions for LTC financing. Additionally, a number of countries including France, Austria, Finland, and Germany have announced plans for financing reforms (source: https://ec.europa.eu).

A reform to the social care funding system in England was also announced in September 2021.

International reports and sources

An EU report (2021) highlights recent reforms related to financing and coverage of LTC in Member States.

Since 2017 Austrian federal provinces can no longer use assets of people in residential care, (or assets of their relatives, heirs or gift-recipients) to cover the costs of care. In January 2020, a yearly indexation of long-term care cash benefits was established (source: Publications catalogue – Employment, Social Affairs & Inclusion – European Commission (europa.eu).

Last updated: September 8th, 2021


An EU report (2021) noted that the federated region of Wallonia recently reformed the financing mechanism for residential care facilities and established a regulation for the daily fee.

Last updated: November 23rd, 2021


In 2019 the personal care allowance for the most dependent groups of beneficiaries (apart from people in residential care) has been increased by 45 % (source: Publications catalogue – Employment, Social Affairs & Inclusion – European Commission (europa.eu).

Last updated: September 8th, 2021


An EU report (2021) noted that France has announced a reform plan in response to the COVID-19 crisis  which proposes numerous measures regarding long-term care which include (among other things): establishing a new financing mix for the supply of LTC (e.g. combining healthcare and social care expenditure in residential care to decrease the remaining amount payable by residents); changing the existing financial support system (e.g. a new cash benefit for homecare); and increasing resources to support informal carers. Additionally, the 2020 law on social debt and autonomy created a fifth sector of the National Health System, dedicated to the loss of autonomy of older people and people with disabilities, with EUR 1 billion funding.

Following the Segur de la sante (wide stakeholder engagement in 2020 to recover and build resilience in health and care), a national investment strategy was adopted and is devolved from national to regional level. This gives greater decision-making power to regional structures (ARS) to enable them to be closer to local needs and reduce complexity/length of allocation and increase clarity/transparency around decision-making.

Author: Alis Sopadzhiyan (LTC Covid profile pending)

Last updated: December 3rd, 2021


From 2017 the legal entitlement to LTC benefits and the categories of beneficiaries have been extended (particularly to people with dementia) by recognising cognitive and mental capacity as part of the instrument used to assess people’s care level. The assessment encompasses the six areas: mobility, cognitive and communication abilities, behavioural and mental difficulties, self-care, ability to cope and independently manage health or therapy related needs and burden, organising everyday life and social contacts; in addition, the amount of benefits have increased substantially for most through the reorganisation of support entitlements into five care grades. No person already receiving support should have been worse off following the reform.

Co-payments for people living in residential care settings no longer depend on a person’s care grade. All people in living in a nursing now pay the same care-related co-payment (the amount differs between residential homes). In addition, people in full- or part residential care settings receive a legal entitlement for additional offers of care.

As part of this ‘second care strengthening bill’ (zweites Pflegestärkungsgesetz) contribution rates to the mandatory long-term care insurance increased by 0.2 percentage points (to 2.55 per cent for people with children and 2.8 per cent for people without children).

Advice on available care and support through the long-term care insurance has been strengthened through an initiative to expand the network of advice centres as part of the third care strengthening law’ (drittes Pflegestärkungsgesetz) (Source: Bundesministerium fuer Gesundheit; Bundesministerium fuer Gesundheit – die Pflegestaerkungsgesetze

Since 2019, Germany exempts children of people in need of care with an annual gross income of less than EUR 100,000 Euro from the obligation to cover care costs not covered by the care beneficiary, regardless of the care setting. Moreover, numerous reforms,  adopted between 2008 and 2019, have extended benefits to facilitate and provide incentives for informal care as a measure targeting affordability (source: Publications catalogue – Employment, Social Affairs & Inclusion – European Commission (europa.eu).

In June 2021 a new care reform was passed. The reform seeks to relieve people living in residential care settings for longer periods of time from some of the co-payments. For example, the reform seeks to reduce co-payments of people living in residential care for more than 12 months by 25 per cent (on average €228 per month based on average contributions of €911). This reduction increases with time spent in residential care. For people living in residential care settings for more than 36 months, the reduction will amount to 70 per cent (on average €638 per month based on average contributions of €911).

The reform is planned to be financed by a federal grant (1 billion per year) and an increase in the long-term care insurance of 0.1 per cent for childless people. (Source: Bundesministerium fuer Gesundheit)

Last updated: September 10th, 2021   Contributors: Klara Lorenz-Dant  |  


The country reinforced homecare by introducing a cash benefit for people employing a fulltime carer (source: Publications catalogue – Employment, Social Affairs & Inclusion – European Commission (europa.eu).

Last updated: September 8th, 2021


In 2018, Poland implemented a programme that finances care services in rural areas and smaller towns, which are particularly prone to depopulation and ageing due to migration processes. Under the programme, local authorities may be granted a subsidy to enable homecare services.  In 2019 a cash benefit was introduced for adults who are unable to live independently. A definition of ‘inability to live independently’ was established, together with new assessment rules (source: Employment, Social Affairs & Inclusion – European Commission).

Last updated: November 24th, 2021


An EU report noted that in 2020 the country adopted new cost standards for all social services, including residential and homecare services for both public and private service-providers.

Last updated: September 7th, 2021


An EU report (2021) noted that financial contribution from state to social service providers has been significantly increased in Slovakia, which is estimated to have increased the supply of long-term care services and has made these services more affordable.

Last updated: September 7th, 2021


An EU report noted that a Dependency Shock Plan 2021 was approved in Spain which, among other things, increased financing to the LTC, the increase in funding is supposed to be dedicated to the adoption of specific SAAD (System for Promotion of Personal Autonomy and Assistance for Persons in a Situation of Dependency) improvement measures including ensuring adequate working conditions for people who work in the SAAD and improvements in services and benefits to guarantee adequate care for dependents.

Last updated: September 7th, 2021


On September 7th, 2021, the Prime Minister announced a social care reform plan to cap the costs of social care, with the aim of protecting people against catastrophic costs of care. This is to be funded through a new UK-wide 1.25 per cent Health and Social Care Levy that will be ring-fenced for health and social care, based on National Insurance contributions. This levy will be applied to all working adults, including those over state pension age. Of the £36bn that will be raised through this mechanism, £5.4bn will be for social care (spread over 3 years).

The new cap on social care has been set at £86,000 in care costs over the course of a person’s lifetime (estimates vary but it would take someone in residential care around 4 years to reach the cap and around 6 years for someone receiving home care). So far it seems that the cap will start from October 2023 and that costs up to that point will not be taken into account. The cap will only cover ‘personal care’ costs, such as dressing, washing, and eating, amongst others. Accommodation, food, and other ‘hotel costs’ that are included in care home fees and costs of other forms of social care support (such as activities to enable social participation) will not count towards the cap.

An important measure included in this reform will be an increase to the means-test, changing the ‘floor’ above which individuals are able to access any public funding for social care, which will change from £23,350 to £100,000. People with assets below £20,000 will not be asked to contribute to the costs of their care from their assets.

In summary, people with assets over £100,000 will be ‘self-funders’ until the amount they have spent on ‘eligible care costs’ reaches the cap of £86,000. People with assets between £100,000 and £20,000 will contribute to the costs of their care from their assets and income until they have either reached the cap or have less than £20,000 left in assets and savings. People with assets below £20,000 will only be asked to make contributions from their income. The financing of long-term social care for working-age adults has not been considered.

This article by Natasha Curry in the BMJ provides an initial analysis of the changes.

An amendment to the Health and Care Bill has excluded means-tested council support payments from the new £86,000 lifetime limit on costs.

The government published its long-awaited white paper for social care reform on 1st December 2021. In it, it restated its plans to raise additional funding for social care via a health and social care levy (as previously announced on 7th September 2021) and that, beyond the three year spending cycle, there is an intention for a greater share of the revenue to be allocated to social care (at present, only £5.4bn of the total £36bn raised is set to flow to social care in England). The majority of that extra funding will go towards the new cap on costs and the more generous means test. In addition, it is intended to fund fairer fees for providers of social care, better staff training and investment in innovative care models, housing and digital and technological initiatives. On launch, the document was met with scepticism that the funding envelope would be adequate to achieve the vision that it set out (see for example: Adass; LGA;   LGA responds to adult social care reform white paper | Local Government Association; Social care white paper an important step but must be financially backed to pull care sector back from the brink | The Nuffield Trust).

Last updated: December 5th, 2021   Contributors: William Byrd  |  Adelina Comas-Herrera  |  Natasha Curry  |  


Contributors to the LTCcovid Living International Report, so far:

this list is regularly updated to reflect contributions to the report, if you’d like to contribute please email a.comas@lse.ac.uk

Elisa Aguzzoli, Liat Ayalon, David Bell, Shuli Brammli-Greenberg, Jorge Browne Salas, Jenni Burton, William Byrd, Sara CharlesworthAdelina Comas-Herrera, Natasha Curry, Gemma Drou, Stefanie Ettelt, Maria-Aurora Fenech, Thomas Fischer, Nerina Girasol, Chris Hatton, Kerstin HämelNina Hemmings, David Henderson, Stefania Ilinca, Margrieta Langins, Shoshana Lauter, Kai Leichsenring, Elizabeth Lemmon, Klara Lorenz-Dant, Lee-Fay Low, Joanna Marczak, Elisabetta Notarnicola, Cian O’DonovanCamille Oung, Disha Patel, Eleonora Perobelli, Daisy Pharoah, Stacey Rand, Tine Rostgaard, Olafur H. Samuelsson, Maximilien Salcher-Konrad, Benjamin Schlaepfer, Cheng Shi, Cassandra Simmons, Andrea E. SchmidtAgnieszka Sowa-Kofta, Wendy Taylor, Thordis Hulda Tomasdottir, Sharona Tsadok-Rosenbluth, Sara Ulla Diez, Lisa van Tol, Patrick Alexander Wachholz, 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.