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

In recent years some drawbacks of the social long-term care insurance structure in Germany 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. Finally, the financial situation of the German social long-term care insurance is tight, because of the 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 main problem here is to finance the transition from one system to another system. Some proposals are discussed here. 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