“Long-term care in the EU – Models of financing, eligibility criteria, assessment of needs and service providing” Workshop on Long-term Care Nov E. Pavolini, Università di Macerata (Italy)

LTC reforms’ dilemmas 1. Model of financing 1. Model of financing: Compulsory Social Insurance vs. General taxation (vs. State-supported private insurance) 2. Eligibility criteria 2. Eligibility criteria: Young-Adults vs. Elderly; a little to everybody (with LTC needs) vs. a lot to the most in need 3. Provision: Cash vs. Services 4. The impact on the labour market 4. The impact on the labour market: a policy focusing only on individuals and households with LTC needs vs. a policy focusing also on the labour market consequences of LTC policy design

Countries in the study: - England - Denmark - Sweden - France - Germany - The Netherlands - Austria - Spain - Italy - The Czech Republic - An overview on Central-Eastern European Countries

Model of financing Model of financing: Compulsory Social Insurance vs. General taxation (vs. State-supported private insurance) 1. Compulsory Social Insurance (e.g. Germany): - Strenghts - Strenghts: a. possible “institutional design” integration in Welfare State Systems based on this principle (for unemployment benefits, pensions, health care) b. potential high level of financial resourses’ pooling - Weaknesses: a. a high burden on entreprises and workers (salaries) b. more useful in an “Industrial” economy than a “post-industrial” one (with less “ideal-type” workers)

Model of financing Model of financing: Compulsory Social Insurance vs. General taxation (vs. State-supported private insurance) 2. General taxation: (e.g. Denmark) - Strenghts - Strenghts: a. less pressure on workers and entreprises b. fostering “Universalism” in the perception of what LTC is - Weaknesses: a. risks of fostering social and economic inequalities if the country has middle-to-serious “tax evasion” problems (e.g. Italy) b. risks of “de-institutionalization” of LTC programs if there is not a clear defined mechanism linking automatically where and how financial resources are gathered

Model of financing Model of financing: Compulsory Social Insurance vs. General taxation (vs. State-supported private insurance) 3. State-supported private insurance: - Strenghts - Strenghts: less direct costs for the State and entreprises - Weaknesses: high risks of unequal (income-related) access to LTC provision

Eligibility criteria Eligibility criteria: 1. First dilemma: a program for all people with severe disabilities or two different programs depending on the age of the dependent person? - One program - One program: e.g. most European countries a. Easier to build and to administer b. Easier to legitimate in the public opinion debate c. Risks of “capture” by dependent young-adults’ associations (in terms of how the program is set and organized) - Two programs: e.g. France a. Easier to develop specific provision given the differences between the needs of young-adult disable individuals and the ones of eldelry dependent individuals b. More complex to manage

Eligibility criteria Eligibility criteria: 2. Second dilemma: “a bit to everybody” or “a lot to the few most in needs”? - “A bit to everybody” - “A bit to everybody”: e.g. Italy a. Able to reach a vast amount of potential beneficiaries b. Risk of spreading resources in a way that are not enough to help medium-to- high level dependency cases - “A lot to the few most in needs”: e.g. England and increasingly Sweden a. Good-quality support for the most in need b. Risk of not supporting people with medium-to-low disability levels with possible faster worsening of their conditions  There is a possible “Third way” graduation of intervention based on LTC needs  There is a possible “Third way”: e.g. France (or, more expensive, Germany) with a graduation of intervention based on LTC needs Selective Universalism co-payment  The French case is interesting because it introduces a principle of “Selective Universalism”: everybody has the right to have access to the public LTC system but the beneficiary will have to pay a co-payment based on her/his economic resources

Provision : 1. First Dilemma: cash or care or cash and care? - “Cash” - “Cash”: e.g. Italy a. Strenghts a. Strenghts: quite flexible use by beneficiares; less administrive costs of the State b. Weaknesses b. Weaknesses: risks of inappropriate use from a quality of care point of view (LTC as an “experience good”), from a labour market and tax evasion point of view (individuals hiring care workers with irregular contracts) - “Care” services: e.g. Sweden and Denmark a. Good-quality and appropriate care b. Risks of professionals-led provision and not enough flexibility/autonomy based on individuals’ choices - “Cash and care” - “Cash and care”: e.g. Germany The German system offers an opportunity of choice to beneficiaries between a cash allowance (lower in terms of economiv value) or care services. It must be kept in mind that the vast majority of beneficiaries prefers cash possible solution accountable  A possible solution is to give cash to beneficiaries but asking them to be accountable (receipts, labour contracts, etc.) on how they use the financial resources they have received (e.g. France and the Netherlands)

Provision : 2. Second Dilemma: aging in place as the main strategy or there is still place for strengthening/maintaining residential care? - “Aging in place” - “Aging in place”: a. The main strategy: Helping frail elderly to remain and to be cared at home has been the main goal of LTC policies in the last two decades; it is still the most important goal BUT…. b. The paradox: It should be remembered that a good “aging in place” strategy requires a good residential care supply  Most Central-Northern European countries that have a strong “aging in place strategy” do also have a relatively strong presence of residential and nursing homes (covering at least 4-5% of the over 65 y.o. population) (e.g. Sweden and Denmark, but also Germany and France)  In this way they avoid that “aging in place” becomes an excuse to cut costs and put on the shoulders of informal carers a high burden  Therefore mantaining (or even increasing in some countries) a certain level of residential care is not an alternative to strenghtening an “aging in place” strategy

LTC reforms and their impact on the labour market LTC reforms and their impact on the labour market: There is a strong (potential) relationship between LTC policies and employment policies: 1. LTC is a labour-intensive sector: 1. LTC is a labour-intensive sector: OECD (2011) tells us that the occupation in the sector is quantitatively relevant and it could be so even more in the future, given the population aging 2. LTC as a concilation issue for working women in their 40s and 50s 2. LTC as a concilation issue for working women in their 40s and 50s: there is an increasing number of women, either working or willing to do so, who face also the problem of having frail elderly parents (or parents-in-law); if the reconciliation issue in the past was only with reference to children (how to work and care?), now it is also in relation to how to work with frail elderly parents  The shape that LTC policies take will influence these two issues: - if LTC policies foster the expansion of services we will have a positive impact in terms of (qualified) occupation in the field and, partially, conciliation for working informal carers - If LTC policies foster cash instead of services, we will have a potential positive impact on occupation (but part of this occupation might be “irregular” – e.g. the “migrant LTC carers” in Southern Europe) and a possible positive effect also on conciliation (even if there is the possibility that informal carers will decide to withdraw from the labour market in order to care for their frail eldelry and be paid for it)