Long-Term Care Financing: setting the foundations Adelina Comas-Herrera PSSRU London School of Economics and Political Science Contact: a.comas@lse.ac.uk IAGG, 2nd Africa Region conference Nairobi, December 2016

Outline: Why collective LTC funding? collective vs individual/familial responses Public sector tools to finance LTC Looking forward to African innovations on LTC financing

1. The rational for collective long term care funding Collective vs individual/familial responses

Most LTC risk is shouldered by families Families are the largest source of Long Term Care resources (in-kind). Unpaid family care does not carry a price, but it certainly has a cost: Cost of reduced employment (risk of impoverishment, loss of social protection…) Costs in terms of carers health and quality of life Long-term costs for child carers The costs of formal care can easily be catastrophic, consuming entire lifetime savings

Lifetime costs of care Estimated costs At 65, excluding accommodation costs, England, 2009. Fernandez & Forder, 2011

The many forms of LTC “insurance”: Public sector schemes: Tax-funded or social insurance Covering all the population (universal) or those without assets or family care (residual) Private long-term care insurance schemes Families, offering care and support to members who need it Community support, more or less formalised In most countries public and private LTC coverage protection systems coexist and complement each other.

2. Public sector financing for LTC

Public sector Financing of LTC Tax-based systems Variety of approaches, from residual “minimalistic” systems to generous universal care coverage. Usually developed from social protection approach. Susceptible to cuts: social care has lower political clout than health, education… Often entitlements are not clear Social LTC Insurance systems Funds raised additionally and specifically for LTC: protection from political interference Usually linked to health social insurance infrastructure Clear rules of entitlement and co-payments Expanding in Asia, following Japan and South Korea, pilots in China

3. Looking to the future

LTC in Africa: in initial considerations Addressing ageing cannot be left to the future: happening very fast, yet not in the political agenda. Making explicit that unpaid care is not cost-less: impoverishment, labour participation, health What is transferable from the experience (and difficulties) of high income countries? How can existing service infrastructures can be adapted/expanded to deliver LTC? Responding to ageing requires: Universal Health Coverage, improved Social Protection & a Long-Term Care System

Looking forward to African innovations on LTC financing: Building on the Health Financing systems Community Based Health Insurance (CBHI) successes in Ghana, Rwanda Social Health Insurance (SHI) being planned/expanded in many African countries Towards LTC Social Insurance System: include LTC support in CBHI/SHI health insurance schemes? Social Protection: Use current cash transfer systems to include additional support for LTC?