Defusing the demographic “time-bomb” in Germany

Abstract

When in 1998, Rainer Hammerling's parents became too flail to cope with daily life, Rainer decided to give up his job and look after them. All I wanted to do was guarantee them a life in dignity until the end he says. A professional masseur, specialized in caring for people living with HIV/AIDS, Hammerling was able to cope with his parents' steadily deteriorating condition, but it wasn't easy, partly because he found himself so isolated. didn't understand, he says. They wanted to know why I didn't put my parents in an old people's home. And there were financial problems too. While his parents benefited from Germany's long-term care insurance, introduced in 1995, it did not fully cover his loss of income. In Germany and many other countries, life expectancy is going up. More and more people live longer and enter an age when they may need care. At the same birth rates have not been high enough to replace the population since the early 1970s and continue to be low. result is less money for an increasing number of people in need of care. Between 1955 and 1965 we had a baby-boom. There will be a large group of old people getting flail in 20-25 years time says Clemens Tesch-Romer, Director of the German Centre of Gerontology in Berlin. We still do not have a good solution to this problem. care insurance or Pflegeversicherung--as distinct from health insurance--covers the care needs of people who as a consequence of illness or disability are unable to live independently for a period of at least six months. Germany's long-term care insurance is a mandatory scheme with contributions divided equally between the insured and their employers. Eligibility is not based on age, but almost 80% of beneficiaries are 65 years old or older. Recipients are categorized according to three levels of dependency. According to the latest figures, of Germany's 82 million people, roughly 79 million have some form of long-term care insurance. Of those, roughly 88% are public and 12% private. Most beneficiaries of Germany's long-term care insurance stay at home (69%). That way they can opt for a monthly cash payment--in 2012 between 235 [euro] (US$ 300) and 700 [euro] (US$ 930)--to cover their care needs or can receive in-kind benefits--in 2012 between 450 [euro] (US$ 600) and 1550 [euro] (US$ 2065)--in the form of professional care services. People can also give the money to a caregiver friend or relative. For the remaining 31% of beneficiaries living in care, these payments only cover a portion of the monthly cost of institutional (nursing home) care, Tesch-Romer says. If they can, recipients supplement the long-term care insurance with other insurance or pension schemes. If they can't, their families are obliged to step in and, if not, recipients must apply for social assistance as a last resort. Germany's long-term care insurance system is responsible for testing the quality of care in the country's 12 000 or so care facilities while recipients can choose which service they want and where. system has also led to greater awareness. The topics 'dementia', 'quality of care' and 'quality of life in old age' are now in the mainstream of public discourse Tesch-Romer says. Germany is one of four countries with a long-term care insurance system. others are Japan, the Netherlands and the Republic of Korea. Other long-term care systems are funded by tax revenues to varying extents depending on the country. In countries with no system, the financial burden falls on the individuals in need and their families. Long-term care is a challenge for every country says John Beard, director of the Department of Ageing and Life Course at the World Health Organization (WHO), which is devoting this year's World Health Day on 7 April to the theme of Ageing and Health. It can be financed out of pocket, by government tax revenues or through insurance. These four countries have opted for a mandatory insurance scheme, a system that ensures that everyone has at least some protection against these costs. …