Demand among older persons (65 years and over) for long-term care (LTC) – that is, for assistance with everyday activities – is gradually increasing throughout OECD countries as populations grow older and household structures change. At the same time, there are rising expectations for quality, affordable, and widely available LTC services. Population ageing and societal changes will lead to significant increases in LTC expenditures. On average, LTC spending is projected to at least double by 2050.
Growing demand for care and the associated costs present a significant challenge for social protection systems throughout the OECD, as they need to ensure that LTC needs do not go unmet while balancing fiscal sustainability. Currently, there is little comparative information on how LTC spending matches individuals’ actual costs of care. This report seeks to shed light on the adequacy and effectiveness of public social protection systems in reducing the burden of the high costs of LTC on the individual and the associated increase in poverty risk. To do so, the report defines a set of “typical cases of LTC needs”. The typical cases describe an older person in terms of the types and severity of their LTC needs, based on their limitations in performing basic activities, such as bathing, dressing, cooking, and cleaning. The typical cases also describe the amount of time of professional services they require to provide help. This approach allows to compare the level of public benefits and services in different countries for a defined level of LTC needs.
This report examines the generosity of public systems in helping older people meet the costs of care. It provides a comparison of the share of LTC costs that are covered by the public system and what is left for individuals to pay out-of-pocket, for different degrees of needs and means (income and wealth). It points to gaps in generosity, with a number of countries leaving individual with severe needs and low incomes with high out-of-pocket costs. The report also assesses how effective systems are in reducing poverty risks due to LTC and how this is related to different aspects of the LTC system. While public social protection reduces the poverty risks associated with LTC, it is not enough in many countries. Finally, the report also assesses the implications of population ageing in terms of expenditures and of possible ways to raise funds. Additionally, it examines the impact policy reforms seeking to improve affordability for users, and those looking at the implications of improved targeting, promoting healthy ageing and productivity improvements.