German Nursing care (Pflegepflichtversicherung): The "5th pillar" of the social security system
Added in 1995 as the "5th pillar" to the social security system, nursing care insurance covers the risk of becoming dependent on nursing care and attention, which may arise as from serious accidents, illness, disease or in old age.
Nursing care insurance is obligatory for everybody who has health insurance.
Nursing care insurance is taken out with the same company that provides your health insurance. If you are covered by state health insurance you automatically qualify for long-term care insurance. If you have private health insurance and are entitled to general hospital care, you also have private long-term care insurance.
As for health insurance, state long-term care insurance is financed through contributions of 2.35% or 2.6% of your gross salary. The employer only contributes up to 48.47€ per month when it costs around 107€ for someone without children. Employers deduct contributions directly from wages and transfer them to the insurance funds.
You are eligible for nursing care payments if you require frequent or substantial help with normal day-to-day activities on a long-term basis (i.e. an estimated six months or more). The following areas - personal hygiene, eating, mobility and housekeeping - are taken into account when determining whether you need assistance.
Assistance consists of someone helping you to carry out normal activities of daily life, helping you to perform these tasks at least partly on your own, or supervising and guiding you when carrying them out. You can choose between non-cash benefits (care provided by an agency) and cash benefits (with which you can pay your family who takes care of you).
What is the long-term care system?
In general social care systems in European member states can be grouped into three categories:
- The state responsibility model,
- The family care model, and
- The subsidiary model.
The subsidiary model is common in Germany, but until 1994 long-term caregiving was predominately the task of the family and only those who could not cover the costs could apply for means-tested benefits from the social assistance scheme. After debates driven by increasing social assistance expenditures, a mandatory and universal system of social long-term care insurance (LTCI) was introduced as a fifth pillar of the social security system in Germany in 1995. The LTCI covers almost the entire population, using the principle that long-term care insurance follows health insurance. Members of the public health insurance system become members of the public LTCI scheme, and those who have private health insurance are obliged to buy private, mandatory LTCI providing the same benefit packages.
The LTCI scheme has the following main objectives:
- Providing social security against the risk of needing care in a similar way as insurance against illness, accidents and unemployment, and protecting income in old age;
- Helping to mitigate the physical, mental and financial stresses resulting from the need for care and ensuring that the majority of individuals affected no longer depend on social assistance because of their need for care;
- Enabling persons in need of care to stay in their home and family environment for as long as possible. Long-term care insurance services are based on the principles of prevention and rehabilitation before care, outpatient care before inpatient care and short- stay care before full-time inpatient care;
- Improving social security for carers who are not employed in order to promote willingness to provide care at home and to recognise the great commitment of carers who often give up their jobs fully or partially because of caring; and
- Helping to expand and consolidate the care infrastructure and encouraging competition among service providers.
The LTCI does not cover all expenses incurred by long-term caregiving. All insurance benefits are capped. The aim is to provide insurance covering basic long-term care needs, but not all of them.
Benefits are available for all insured persons depending on the extent of the need for care, but irrespective of age, income or wealth. Since July 2008, the time to qualify for benefits has been two years. The entitlement to claim benefits is based on whether the individual needs help with carrying out at least two basic activities of daily living (ADL) and one additional instrumental activity of daily living (IADL). Three levels of dependency are distinguished by how often assistance is needed and how long it takes a non-professional caregiver to help the dependent person.
- Care level I: People who need assistance with personal hygiene, feeding or mobility for at least two activities from one or more areas at least once a day, and who additionally need help in the household several times a week for at least 90 minutes a day with 45 minutes attributable to basic care.
- Care level II: People who need assistance in at least two basic ADLs at least three times a day at various times and additional help in IADLs several times a week for at least three hours a day, with two hours attributable to basic care.
- Care level III: People who need assistance in at least two ADLs around the clock and additional help in an IADL several times a week for at least five hours per day, with four hours attributable to basic care.
- Hardship cases: People at care level III and in particular individuals who need assistance in ADLs for at least seven hours a day with at least two hours during the night, or who need basic care that can only be provided by several individuals together (at the same time).
The various forms of long-term care services offered under the German legislation include benefits for caregiving at home in cash and in kind, in day or night care institutions and in nursing homes. Additional counselling for those in need of care and their relatives is provided as well as training for family caregivers. Law sets the benefits. Beneficiaries may choose among different benefits and services.
Social long-term care insurance is funded by means of salary deductions of income-based insurance contributions. Law sets the contribution rate. Since July 2008 the contribution rate has been a uniform 1.95% of income subject to contributions. Additionally, members aged 23 and older without children have to pay a surcharge of 0.25% (since January 2005). Dependent children and spouses, whose monthly income does not exceed the contribution threshold, are insured without contributions as part of family insurance. There is comprehensive financial balancing among the long-term care insurance providers.
The premiums in private, mandatory LTCI are not based on the income of the insured person, but on the age of the person when the contract was taken out. Insurance companies have agreed on financial balancing among each other.
The costs for long-term caregiving that are not covered by the LTCI funds have to be paid by the care recipients themselves. Sometimes co-payments can be substantial and persons in need of care who are not able to cover these costs can apply for means-tested social assistance.
The Länder (federal states) have the responsibility for financing investments in premises for long-term care services. Regulations vary greatly among the 16 provinces. Some Länder directly finance investments in nursing homes, while others only provide subsidies for dependent older persons living in nursing homes who currently rely or who would otherwise rely upon social assistance.
In 2007 around 2.25 million persons received benefits from the private and social long-term care insurance funds. This was 2.73% of the total population in Germany. Around 1.86 million recipients were aged 65 and older. Thus, 11.3% of the elderly population received benefits for long-term care.
Statistics show that the need for care is strongly related to age. While only 2.6% of persons aged 65 to 70 received benefits, the share increases sharply with age:
- 4.9% at age 70-75,
- 10% at age 75-80,
- 20% at age 80-85,
- 37% at age 85-90 and
- 62% at age 90 and older.
The share of those in need of highly intensive care (care level III) is highest in the younger age groups, but the share rises again in the very old ages. Two out of three beneficiaries are women. Owing to the higher life expectancy of women, their share of beneficiaries, at 80%, was the highest in the oldest age group.
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