Long-term care insurance
What is long-term care insurance?
Long-term care insurance was introduced on 1 January 1995 as an independent branch of social insurance. All persons with statutory or private health insurance are required to have comprehensive long-term care insurance. Anyone with statutory health insurance also has statutory long-term care insurance. Those with private health insurance must take out private compulsory long-term care insurance.
The long-term care insurance benefits are funded by contributions that are paid by employers and employees in largely equal part. Under which circumstances people with long-term care needs can receive insurance benefits and what concrete benefits they are entitled to depends on the duration of their need for care, their assigned level of care (Pflegegrad) and the type of care they need. Does someone only need support with their daily bathing or shopping? Can that person still find their way around? Are they able to live at home or do they need around-the-clock care in a nursing home? Depending on the extent to which someone’s independence and abilities are restricted, they are assigned different levels of care (Pflegegrade).
Long-term care insurance provides those in need of care with the option to decide for themselves what care they receive and who will provide it. They can choose whether to get assistance from professional carers or to receive money that they can, for instance, provide their family caregivers to show their appreciation. The primary goal is to enable people with long-term care needs to live as independently as possible. However, statutory long-term care insurance frequently does not cover all long-term care costs. The remaining costs are borne by the long-term care recipients themselves or by direct family members if applicable. If financial assistance is needed, those costs are borne by social welfare. This is why the long-term care insurance is also called a “system of partial benefits”. All relevant regulations on long-term care insurance can be found in Book XI of the German Social Code (SGB XI).
Why do we need long-term care insurance?
All industrialised nations have one thing in common: Their societies are ageing. According to current research on demographic trends, the number of older people (67 and older) in Germany is projected to rise to almost 21.5 million by 2040. However, this positive trend towards a longevity society also has a downside. People aged 80 years and over have a drastically increased statistical risk of having to rely on the help of others. This means, the older the population, the more people will be in need of care. To be in need of care places high physical, mental and financial burdens upon those affected as well as their relatives, particularly since family patterns have changed. Families are having fewer children and those children are oftentimes employed and unable to provide as much care to their parents as earlier generations did.