Long term care reform in Germany - at long last

Long term care reform in Germany - at long last


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Speaker(s): Sabrina Link

Private long-term care (LTC) insurance protects against costs which arise from a care need. It pays when the insured is too frail to care for themselves without the physical assistance of another person even when using assistive devices. In more and more countries it is perceived as a much-needed product to supplement the protection provided by the government's safety net which, if existent at all, usually only covers part of the expenses. In countries where a public scheme exists, private insurance products often copy the local definition. In Germany a combination of the social security definition, an ADL-based trigger and a dementia trigger was usually used. At the start of 2017, the German compulsory LTC insurance scheme underwent comprehensive reform that reframed the definition of care which has repercussions for the local private insurance industry. The reform introduced a new "in need of care" definition. It also added a new evaluation instrument for determining the need for care which comprises six modules covering physical and cognitive abilities, behavioural patterns and handling medication.
In this talk I will give background information on the German LTC social security system and describe the former definition of care needs. I will present the new definition and the new care assessment and point out the major changes, for example the now appropriate recognition of cognitive impairments or the focus on the degree of independence instead of on the length of time required for care. Furthermore, for people living in a care home the contribution to be paid will no longer be dependent on the severity of the care need. I will conclude my talk with the implications this reform has for the insurance industry with respect to in-force policies, designing of new products and pricing.

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