Act on insurance for long-term care

• Abstract
• Purpose of health policy or idea
• Characteristics of this policy
• Political and economic background
• Purpose and process analysis
• Expected outcome
• References

Featured in half-yearly report: G-politik in Industrieländern 9

Abstract

Long-term care is an area with a very fragmented approach. The state established a number of solutions specific for each sector and consequently also separately approached financing of such services. In addition, Slovenia experienced a rather quick and profound demographic transition with the number of the elderly increasing by 50% in 20 years. A more suitable and sustainable solution for long-term care insurance has to be established, providing stability and security for such situations.

Purpose of health policy or idea

Long-term care currently has several solutions, which are disease- (e.g. mental health) or sector-specific.(e.g. social care institutions). Furthermore, these solutions are suited for far smaller populations of those who need long-term care than the current and the future needs. All of the latter will not be sustainably resolved in the framework of the existing policies and insurances, since both the numbers of the elderly as well as their dependency levels will increase dramatically over the next 15 years. The speed of demographic change together with the quickly approaching ageing of the baby-boomers will both contribute to sharp increases in the need for long-term care. The following issues were considered in preparing the draft law:

1. It is becoming impossible to have a sustainable system of long-term based only on the present concept of disability and pension insurance with all the benefits included as they are.
2. It may become necessary to involve more significant levels of private expenditure but the primary aim is to secure a publicly established and compulsory system as a base and only then supplement it with additional funds.
3. Currently, the elderly residing in homes for the elderly and their relatives contribute significantly against the cost of their own stay (over 40% in total in 2005).
4. Simultaneously, the contribution of municipalities is gradually but consistently increasing and has reached around 11% in total for both the partial and the total contributions.
5. A special problem is the poorly covered population of younger adults and middle-aged persons with a need for long-term care - we could call these drop-outs from any system at present; those who require institutional care can count on trying their chances by applying for a post at a home for the elderly - these homes now keep a certain (small) number of places for the people aged 20-64.
6. The present system of home care and assistance at home is rather stretched as it depends mostly on the district nurses who have a series of other tasks to perform - but over 45% of their time now goes to those over 70 years of age.

The law therefore proposes two types of long-term insurance - compulsory and voluntary. The compulsory long-term insurance would be provided for and organised as a non-profit insurance by the Health Insurance Institute of Slovenia (HIIS). Based on the proposal, there would be the following rights:

• services of long-term care;
• in-cash benefits;
• a combination of in-cash benefits and services;
• smaller adaptations of own apartment through which the insured would gain the possibility of receiving long-term care at home;
• medical aids.

The services would be provided as: long-term care at home, institutional care as a full-time resident and as a combined type of long-term care. The care would be incremental, starting from the provision of home care. Users would be entitled to choose between the approved services and cash benefits in which case they would find and reimburse their own providers (who would not necessarily be in a contractual relationship with the HIIS). The insured would be people of all adult ages, provided they had been insured prior to the need for long-term care (principle: the younger the person in need, the longer the required period of continuous insurance).

Main points

Main objectives

The objectives of the proposed insurance for long-term care are:

1. providing a sustainable and prospective insurance for all those who need long-term care in their adulthood, whenever the onset
2. providing a range of services that are available for the potential users
3. providing a range of potential benefits for users
4. combining a compulsory and several volunutary schemes - the compulsory scheme would be mandatory by law, the others would be optional and would depend on own decision
5. securing incremental types of care tailored to the needs of users - from home care to full-time institutional care

Type of incentives

There would be an obligation to contribute a certain percentage of gross salary, similarly to other social systems into a national compulsory long-term insurance which would guarantee the basic level of long-term care to all the insured. The users would be entitled either to benefits in kind or to cash benefits. Most of the infrastructure and the system support would be defined at the state level. However, municipalities would ensure the provision of services at the local level and also invest in facilities for long-term care (jointly with the national - state institutions and insurances). The enrollment principles would be the same as for the compulsory health insurance.

Groups affected

Elderly population of Slovenia, providers of social and health care to the elderly and disabled, Health Insurance Institute of Slovenia (HIIS).

Innovationsgrad	traditionell		innovativ
Kontroversität	unumstritten		kontrovers
Strukturelle Wirkung	marginal		fundamental
Medienpräsenz	sehr gering		sehr hoch
Übertragbarkeit	sehr systemabhängig		systemneutral

The policy as proposed tries to base itself on the existing experience of three countries it takes as model settings - Austria, Luxembourg and Germany. It also does not seek to be in the forefront of any wider process, but simply provide a sustainable setting for the needs of the Slovenian ageing population. As the general awareness of these issues is still rather low, especially in those people who lack own personal experience of encountering problems in long-term care for their close relatives, it is expected that there will be a great deal of discussions surrounding the compulsory insurance's levels. For all those who are in need and who anticipate their own needs in the future, this proposals comes just in time to start resolving one of the most burning issues in social insurance in Slovenia.

Political and economic background

The need for a stable and sustainable solution for long-term care did not arise only as a consequence of the government change in 2004, but it had been present for almost a decade before. Of course, the main problem of the present time is the lack of an already adopted legal background which would enact and sanction a long-term care insurance. There is imminent pressure and need to solve this situation by introducing insurance, which would be dedicated exclusively to the long-term care, including all the adult populations. Such a need was expressed in the documents describing social care issues (2), social care strategic documents (3,4) and as an overall strategic priority of the government in this term (5).

Complies with

The need to accept a sustainable system of long-term for the future

Change based on an overall national health policy statement

The Strategy for Social Care 2006-2010 and the Strategy for the Elderly Care until the year 2010 - Solidarity, harmony and quality ageing of the population

Purpose and process analysis

Current Process Stages

	Idee	Pilotprojekt	Strategiepapier	Gesetzgebung	Umsetzung	Evaluation	Veränderung/Richtungswechsel
Implemented in this survey?

Origins of health policy idea

The idea was generated by the government, on the initiative of macroeconomic analysts, the disability and health insurance institutes and the existing providers of long-term care. The main purpose is in securing funding for the future use of long-term care, especially in view of the existing changes in the demographic structure of the Slovenian population and in view of the future challenges, posed, among others, by the growing of age over 65 of the Slovenian 'baby boomers' (mainly born between 1950 and 1955). The second reason for this type of legislation lies in the need of developing a set of new services in providing support for the users of long-term care. Thirdly, there are currently unmet needs, especially by the middle-aged populations and a share of the elderly, which could be better served in the framework of a better structured insurance. Finally, the present system is very fragmented and offers little transparency and is either too disease-driven or too sector-driven. It is intended to establish an entirely new system that should be embedded in a compulsory insurance setting of a range of social insurances. It will most probably be amended by adding a voluntary long-term care insurance option, thus attracting and involving private funds into the system in an organized way (as currently their entry is often the result of imminent needs and serves mainly to pay for services in cash, whether professional or lay).

Initiators of idea/main actors

• Regierung

Approach of idea

The approach of the idea is described as:
new:

Stakeholder positions

The idea of a long-term care insurance and provision and organization of providers of such care dates back a long time, almost two decades. Of course, many factors have influenced its being postponed, temporarily revived and then set aside again. The most important factor provoking its revival were two important factual reasons: one is the quickly changing demographic situation and the other is its direct consequence on the sustaianability of the present social insurance setting. Apart from that, resources are urgently needed that would help people avoid serious sudden burdens placed on their shoulders in the form of searching for providers of care and/or having to face high co-payments or payments out-of-pocket in cases of sudden need for long-term care of an elderly relative. Most of the stakeholders at the national level support the idea of long-term care insurance. The most important differences lie in the following:

1. the approach of an entirely socialized system with the compulsory (mandatory) long-term care insurance being the lead (or even exclusive) type of insurance for long-term care;
2. combination of a long-term care compulsory insurance with different types of voluntary insurance schemes;
3. a purely market- and self-responsibility oriented long-term care.

Most authors and most stakeholders advocate a mixed system with the stability and equity ensured by the compulsory long-term insurance scheme. This would provide a reliable source of funding for all insured for the most extreme needs.

From the present organizational setting of informal care and home assistance in care and activities of daily living, one can see a key problem. It lies in the fact that most users require professional medical and nursing care (not only terminal, but also sustained in non-fatal conditions), but these types of care are not available through lay informal care, established in many municipalities (especially in the cities) and which are co-funded by the City council budgets. There is therefore a certain degree of scepticism related to the development of providers of long-term care, which should be appropriately stratified and developed according to the predominant needs of the users or potential users of these services.

Actors and positions

Regierung
Health Insurance Institute of Slovenia	sehr unterstützend		stark dagegen
Pension and Disability Insurance of Slovenia	sehr unterstützend		stark dagegen
Ministry of Finance	sehr unterstützend		stark dagegen
Providers of long-term care	sehr unterstützend		stark dagegen

Influences in policy making and legislation

There is a draft prepared for public debate which is about to be finalised. Shortly afterwards, the draft will be reformulated to include additional information and solutions provided by the public debate and presented to the Parliament. This should take place still in this year. The issues still discussed are:

1. to establish a separate insurance for long-term care through a newly established provider or placing it into one of the established social insurance provider (such as the HIIS in the proposal)
2. separation or better definition of health care, ADL support and purely informal care
3. involvement of private funds to what extent and how to ensure equity
4. establishment of voluntary long-term care insurance schemes - how to manage them and how to secure equity issues (e.g. through risk equalizing schemes as proposed in the current proposal)
5. how to include informal care and whether it should be covered mostly through cash benefits or through contractual arrangements with the insurance provider

Legislative outcome

pending

Actors and influence

Regierung
Health Insurance Institute of Slovenia	sehr groß		kein
Pension and Disability Insurance of Slovenia	sehr groß		kein
Ministry of Finance	sehr groß		kein
Providers of long-term care	sehr groß		kein

Positions and Influences at a glance

Adoption and implementation

The main actors and stakeholders involved in the adoption process will be the government and the coalition political parties, which have reached a high level of consensus on the general idea of the law. Furthermore, there will be the two largest existing social insurance funds - the health insurance and the pension and disability insurance. Finally, there will be certainly interests on the side of some better organized chronic patients' groups and providers of long-term care. In general, the main controversies will be revolving around the issues related to the regulation of the market for these services and related to the extent of the involvement of private funds and how will they be managed. The sustainability of the public finance should be maintained partly due to the merging of different types of funding of different existing services under one single framework and partly, through the involvement of voluntary insurance schemes. The existing funds spent are of around 232 million € yearly with 18 000 people having institutional care provided through health care insurance, 22 000 people having care provided by the social care insurance and about 27 000 people receiving cash benefits to finance long-term care at home or in combination of home and institutional care. That means that currently there are about 67 000 people served by all the three systems.

Review mechanisms

Halbzeitevaluation

Expected outcome

It is expected that the proposed system will be established, given the large support and high level of agreement on its need. The system will probably be a mixed one with the dominant publicly financed and mandatory insured part and the voluntary part, which is still under discussion, especially with respect to the risk equalization needs and the setting up of the voluntary insurance plans within the commercial or publicly owned insurance companies - specific insurance companies versus general insurances which can offer more flexibility to the users. It is expected that the insurance, if adopted in a similar form as proposed, would start its implementation phase during the year 2009 (given the pessimistic projections for 2020). Challenges to equity exist even more in the present setting where people admitted to institutional settings, in almost one half of the cases have to ensure their own resources to finance this type of care. This would become increasingly more difficult also because of the need for a more stringent policy on the socially secured part of pensions. In future, they are unlikely to represent such a big share of coverage of own spending needs.

Impact of this policy

Qualität	kaum Einfluss		starker Einfluss
Gerechtigkeit	System weniger gerecht		System gerechter
Kosteneffizienz	sehr gering		sehr hoch

Quality of health care services for the handicapped, disabled or for those in need of long-term care was not at its best currently. It depended largely on the innovative approaches taken by the health care staff managing the patient and those of his/her relatives. A special insurance for this purpose will bring the possibility of a wider range of institutions and providers who will offer different services that are currently sought for but rarely provided at a necessary level or intensity. The system is expected to be equitable under the condition that it remains a social insurance type involving every single citizen and creating a broad enough base for financing of these costly and complex services.

References

Sources of Information

1. Draft law for general discussion - Law on Long-term Care and Long-term Insurance. Ministry of Health, Ljubljana, Slovenia, August 2006 (in Slovene).
2. Javornik J (ed.). Socialni razgledi. Office for the Macroeconomic Analysis and Development, Government of Slovenia, Ljubljana, 2006: 101-108. (in Slovene)
3. Resolution on the National Program of Social Care for the Period 2006-2010. Official Gazette of the Republic of Slovenia 2006;XVI(39):4190-4209. (in Slovene)
4. Strategy for the Elderly Care in Slovenia until the year 2010 - Solidarity, harmony and quality ageing of the population. Government of Slovenia, adopted on 21 September 2006. (in Slovene)
5. The Framework of the Economic and Social Reforms for the Increase of Welfare in Slovenia. Government of Slovenia, 2 November 2005: 119-120. (in Slovene).

 

Author/s and/or contributors to this survey

Albreht, Tit

Empfohlene Zitierweise für diesen Online-Artikel:

Albreht, Tit. "Act on insurance for long-term care". Health Policy Monitor, April 2007. Available at http://www.hpm.org/survey/si/a9/1