Design limitations of long-term care insurance schemes: A comparative study of the situation in Spain

Abstract

Social and demographic changes are gradually transforming the way Western societies cope with old-age dependency, in particular the provision of long-term care (LTC). In response to the need for formal care services and financing instruments, this study examines a range of both private and public insurance tools. As a general rule, LTC insurance is markedly underdeveloped. Furthermore, in southern European countries, the role of the public sector in LTC is unclear compared with its role in other, related welfare areas such as healthcare. The study examines the financing alternatives for LTC insurance, taking as its benchmark the Spanish LTC financing reform. It briefly examines some existing, publicly funded LTC financing tools and explores the potential role of private LTC insurance, arguing that it has an active part to play alongside compulsory mainstream insurance schemes and self-insurance alternatives. As in other European countries, Spanish social attitudes show a preference for some kind of general entitlement to publicly funded schemes, although this preference is subject to significant regional heterogeneity.