Can Social Insurance For Long-Term Care Work? The Experience Of Germany

PROLOGUE: Americans have often looked with envy at the German health care system, where citizens enjoy universal access to a comprehensive set of health benefits, all for about half of what Americans pay, per capita. As if that weren't enough, outcomes and satisfaction in Germany are at least as good as (if not better than) those in the United States. Until recently, however, Germans held no apparent advantage in the long-term care arena. Before 1994 Germany's system of public support for long-term care bore a resemblance to the U.S. system in that both were means-tested and state-administered. Growing financial pressure on states and discomfort with the disparity between policy and the German ideal of “social solidarity” led to reforms that have now put long-term care financing on a par with acute care in Germany. In this paper Alison Evans Cuellar and Joshua Wiener review Germany's experience with these reforms and draw lessons for other nations. Cuellar has worked extensively on Medicaid and Medicare policy issues for a decade, much of it at the Urban Institute. She holds a master of business administration degree from the University of Texas and is a doctoral student in health services and policy analysis at the University of California, Berkeley. Wiener, a renowned expert in long-term care, is a principal research associate at the Urban Institute. He holds a doctorate in sociology from Harvard University. ABSTRACT: In 1994 Germany enacted a universal-coverage social insurance program for long-term care to largely replace its means-tested system. The program has achieved many of its stated policy goals: shifting the financial burden of long-term care off the states and municipalities; expanding home and community-based services; lessening dependence on means-tested welfare; and increasing support of informal caregivers. Many of these goals were reached without exploding caseloads or uncontrolled expenditures. We examine the German long-term insurance program, focusing on issues of financing, eligibility and assessment, benefits, availability of services, and quality assurance.