On the need for financial and structural reform of long-term care insurance

When long-term care insurance was introduced in 1994, a number of conceptual decisions were made that continue to shape the system today. This discussion article examines three of these decisions. In each case, an evaluation standard is formulated against which the current situation is assessed. In the case of a negative assessment, reform options are discussed.In combination with the lack of benefit adjustments, the design of long-term care insurance as a system with capped insurance benefits and unlimited co-payments has led to co-payment levels in nursing homes that the majority of residents cannot cover from their income. Therefore, in order to fulfill its original objectives, long-term care insurance would have be turned upside down - by imposing an absolute limit on the amount and duration of the individual co-payments.The "dual insurance system" consisting of a social insurance for the majority and a private mandatory plan for a minority of the population has also proved to be a "birth defect" of the system. Since the group of privately insured persons has a much more favorable risk structure and higher average incomes, the "equal distribution of burdens" in financing required by the Federal Constitutional Court does not exist. To remedy this inequality, the dual system must be transformed into an integrated long-term care insurance system, or at least a risk structure equalization scheme between the two branches must be implemented.The introduction of long-term care insurance as a separate branch of social insurance, however, can be justified. In order to overcome interface problems, it would nevertheless be necessary to place the financing competence for geriatric rehabilitation with long-term care insurance and that for medical treatment care in nursing homes with health insurance.