Germany’s elder plan in trouble

From a WHO story: Germany is one of only four countries with a dedicated insurance system for long-term care. But as the population ages rapidly and birth rates remain low, the system in its current form may not be sustainable.

Germany’s long-term care insurance is funded on a pay-as-you-go basis – whereby contributions are distributed immediately to fund care – which means that premiums have to be raised as the ratio of recipients to non-recipients increases. Some argue for a switch to a prepayment model that would allow a putative long-term care insurance fund to grow with its liabilities. But any reform that would involve an increase in contributions or require more government funding are difficult, not least in today’s economic and political climate

View online at: https://c-fam.org/turtle_bay/germanys-elder-plan-in-trouble/

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