Private Long‐term Care Insurance: A Niche or a "Big Tent
Abstract:Given the expected increase in total long‐term care (LTC) expenditure, there is interest in some OECD countries in the potential role of private LTC insurance. Indeed, financial planning for retirement may include the subscription to a private LTC coverage product to protect one's income and assets against the risk of needing long‐term care, in order to reduce the burden it would create on the family and provide more choices regarding the care received. But, there are very different views regarding the merit of private LTC coverage. For some, this could leverage new financial resources towards long‐term care, thereby alleviating future potential pressures for governments to increase their support. For others, it could represent a less efficient and more costly way to ensure universal and comprehensive coverage, relative to public pooling. However, private long‐term care coverage arrangements represent small markets in OECD countries. This chapter describes and analyses the role and size of private LTC coverage arrangements across OECD countries. It examines the potential factors affecting the size of LTC insurance markets and countries' initiatives to encourage its development. It then discusses the role that private insurance arrangements could play in LTC systems in the future.
Document Type: Review Article
Publication date: May 1, 2011