Reform options for the funding system in Germany's LTCI

Germany's Social Long-Term Care Insurance (S-LTCI) suffers from what has been called a “structural revenue weakness” due to the fact that more than 10 percent of the population are not included in the system and only income from gainful employment and pensions are contributory, while contributions are not levied on capital income and income from rent and lease.

This paper will examine two of the remedies that are proposed against this weakness: (i) the transformation of S-LTCI into a citizens' insurance and (ii) the introduction of (temporary) funding as an additional element.

After discussing the conceptual implications of citizens' insurance, projections of contribution rates for the present S-LTCI and the citizens' insurance are compared. The projections reveal an initial cut of contribution rates by 20 percent, which diminishes over time but even in 2060 stands at 10 percent, due to the introduction of citizens' insurance.

With respect to funding two variants are discussed. Calculations show that a collective fund only shifts the burden over time for some years, but has no long-lasting effect from the middle of this century onwards. The current proposal of the government to financially support voluntary additional funded LTC insurance, however, will hardly have any effect at all.

Literatur:

Jacobs, Klaus/Rothgang, Heinz (2011): Zukunft der Pflegefinanzierung: Eck-punkte für eine tragfähige Reform, in: Gesundheit und Gesellschaft Wissenschaft (GGW): Heft 3, 14–22.

Rothgang, Heinz/Arnold, Robert/Sauer, Sebastian/Wendlandt, Katharina/Wolter, Annika (2011): Berechnungen der finanziellen Wirkungen verschiedener Varianten einer Pflegebürgerversicherung. Gutachten im Auftrag der Bundestagsfraktion Bündnis 90/Die Grünen. http://www.zes.uni-bremen.de/ccm/cms-service/stream/asset/? asset_id=6958367