A probabilistic projection of beneficiaries of long-term care insurance in Germany by severity of disability

Patrizio Vanella,Christina B Wilke,Moritz Heß

doi:10.1007/s11135-020-00968-w

Abstract

Demographic aging puts social insurance systems under immense pressure as frailty risks increase with age. The statutory long-term care insurance in Germany (GPV), whose society has been aging for decades due to low fertility and decreasing mortality, faces massive future pressure. The present study presents a stochastic outlook on long-term care insurance in Germany until 2045 by forecasting the future number of frail persons who could claim insurance services by severity level with theory-based Monte Carlo simulations. The simulations result in credible intervals for age-, sex- and severity-specific care rates as well as the numbers of persons for all combinations of age, sex and severity by definition of the GPV on an annual basis. The model accounts for demographic trends through time series analysis and considers all realistic epidemiological developments by simulation. The study shows that increases in the general prevalence of disabilities, especially for severe disabilities, caused by the demographic development in Germany are unavoidable, whereas the influence of changes in age-specific care risks does not affect the outcome significantly. The results may serve as a basis for estimating the future demand for care nurses and the financial expenses of the GPV.

Highlights

IntroductionDecreasing mortality risk ceteris paribus (c.p.) leads to a larger share of the population in the oldage group (European Union 2017: 25; Vanella 2017: 550) and to an overall higher number of people in need of care, since frailty risks increase with age (see, e.g., Fuino and Wagner 2018a: 56–57; Kochskämper 2018: 9)
Demographic aging is a phenomenon affecting many industrialized societies
The present study showed the effect of future demographic development in Germany on the number of frail persons claiming services from the GPV

Summary

Introduction

Decreasing mortality risk ceteris paribus (c.p.) leads to a larger share of the population in the oldage group (European Union 2017: 25; Vanella 2017: 550) and to an overall higher number of people in need of care, since frailty risks increase with age (see, e.g., Fuino and Wagner 2018a: 56–57; Kochskämper 2018: 9). Different trajectories are commonly based on varying assumptions of the connection between increasing life expectancy and the development of care risks (see Kochskämper 2018: 12–14, among others). Taking Germany as an example, we propose a new and innovative method to project the number of persons in need of care. Germany presents an interesting case study because its population is aging quite rapidly, as is the case for most countries in Europe (United Nations 2019).

Methods

Results

Conclusion