For millions of Americans, long-term care presents enormous financial, logistical, and emotional challenges. Private long-term care insurance is prohibitively expensive or simply unavailable, and most older Americans aren't eligible for Medicaid until they exhaust nearly all their financial resources. Medicaid covers long-term care for the neediest, mostly in institutional settings like nursing homes, and is the single largest payer for long-term care. In the absence of broad financial protection, the majority of families must fend for themselves.
Long-term care—defined as non-medical assistance for senior citizens with functional impairments, and for disabled younger people —is a widespread concern. About one in five people turning 65 will need long-term care for five years or more sometime in their lives. One in seven will spend at least $100,000 of their own money on long-term care needs. The U.S. system is confusing, inefficient, and offers an incomplete patchwork of coverage.
A new Brookings Institution report looks to Europe for a model of how to address this complex issue. "These countries have made real headway in providing their citizens with long-term care support," says one of the report's two authors, economist Richard Frank, senior fellow at the Brookings Center on Health Policy. "By exploring what's been done on the other side of the Atlantic, and how well it's worked, we can learn valuable lessons that we can apply to our own situation in the U.S."
Along with Joan Costa-Font, head of the Department of Health Policy at the London School of Economics, Frank examines the long-term care systems for Germany, England, France, Spain, the Netherlands, Scotland, and several other European countries. While none of these national systems is perfect, all of them are more comprehensive than the current U.S. approach.
These approaches provide useful examples that can help U.S. policymakers develop workable strategies for this country. Frank and Costa-Font note that, overall, European countries tend to see long-term care as a societal and government responsibility rather than a problem for each citizen to solve on their own.
The researchers grouped the countries they studied into several broad groups. Germany, the Netherlands, Spain, Scotland, and Slovenia all use a social insurance model, in which the need for care is collectively insured through mandatory contributions from citizens. All of these countries limit benefits, generally requiring citizens to pay for part of the cost of care. Some, including Germany, also provide financial support for informal caregivers such as family members. While the social insurance approach creates a visible and broadly pooled financing mechanism, it has its flaws: As the need for long-term care increases, governments must increase contribution rates or reduce benefits, something each of these countries has had to grapple with.
England and France take a narrower approach, focusing on providing taxpayer-funded support only for those citizens most in need of help. This strategy reduces costs for the government and helps some lower-income households, but also leaves many middle-income people vulnerable to severe financial risks. Italy uses a somewhat similar system, with a less centralized approach that has led to strong geographic variation: Certain regions provide extensive support, while others do not. Some countries, including Italy, Spain, and Poland, rely heavily on family care, which keeps costs low but can be a financial and emotional burden for caregivers.
Frank emphasizes that the goal of the paper is not to duplicate a particular European approach for the U.S., but to extract potential solutions that could help improve our system. By looking to Europe for ideas, policymakers can develop feasible strategies that have a better chance of being adopted in this country.
Frank notes that there many Americans support such changes. Surveys have found that there is widespread concern about the costs of long-term care, and broad support for an expanded government role. A majority of Americans believe long-term care should not be solely an individual or family responsibility. Many prefer an approach in which government provides help with higher costs, while individuals remain responsible for less significant needs. Across the political spectrum, people support policies to assist family caregivers.
At the same time, however, many of those surveyed remain pessimistic that our leaders will adopt substantive reforms. For change to happen, lawmakers need to listen their constituents and support solutions. European models may pave the way for such reforms.
