Demographic change and its impact on social health plans and long-term care insurance

Demographic change and its impact on social health plans and long-term care insurance


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Speaker(s): Thomas Neusius (Wiesbaden Business School)

The financial evolution of the german statutory insurance system for health and long-term care is analyzed with respect to the demographic dynamics. The german population will undergo a substantial shift of the cohort structure in the next 15 to 20 years. The dynamics can be characterized as an overall aging of the population. About 90% of the population are covered by the statutory health insurance (Gesetzliche Krankenversicherung, GKV) and the social long-term care insurance (Soziale Pflegeversicherung, SPV), the latter providing a partial coverage. Both systems are predominantly financed as pay-as-you-go systems, the premia being related to the individual labour earnings - each employee pays a fixed percentage of his working income as premium.

Therefore, the foreseeable increase in the number of aged cohorts and the reduction of people in the working-age cohorts may lead to rising premia, unless coverage is reduced.A dynamical analysis of the demographic dynamics until 2060 is performed, using various scenarios based on data provided by the federal bureau of statistics (Statistisches Bundesamt). These scenarios of the population dynamics form the input for the calculation of future health-care expenditure. Also, it allows to estimate the available work force.A neo-classical growth model (Solow) is used to determine the time-evolution of the GDP. The GDP evolution is the driver for time dependence of the age-specific health expenditure and the wages. For the simulation of a single scenario, it is assumed that the present political framework stays unchanged. The future increase in health care expenditure leads to increasing percentages of wages required to cover the expenditure by the wage-based premia.

These results were partially obtained in the DAV working group Demography.

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