Future of Long-Term Care Financing for the Elderly in Korea

ABSTRACT

With rapid aging, change in family structure, and the increase in the labor participation of women, the demand for long-term care has been increasing in Korea. Inappropriate utilization of medical care by the elderly in health care institutions, such as social admissions, also puts a financial burden on the health insurance system. The widening gap between the need for long-term care and the capacity of welfare programs to fulfill that need, along with a rather new national pension scheme and the limited economic capacity of the elderly, calls for a new public financing mechanism to provide protection for a broader range of old people from the costs of long-term care. Many important decisions are yet to be made, although Korea is likely to introduce social insurance for long-term care rather than tax-based financing, following the tradition of social health insurance. Whether it should cover only the elderly long-term care or all types of long-term care including disability of all age groups will have a critical impact on social solidarity and the financial sustainability of the new long-term care insurance. Generosity of benefits or the level of out-of-pocket payment, the role of cash benefits, and the relation with health insurance scheme all should be taken into account in the design of a new financing scheme. Lack of care personnel and facilities is also a barrier to the implementation of public long-term care financing in Korea, and the implementation strategy needs to be carved out carefully.     

Long-Term Care Insurance in Japan

Abstract

Among all the industrialized countries, Japan has the fastest rate of population aging and the highest life expectancy at birth. It is projected that the proportion of elderly people will reach 35.7% in 2050. In this demographic environment, Japan launched a social insurance program for long-term care for the elderly in 2000. What were the forces that led Japan to establish a long-term care program for elderly people? What are the provisions for financing, benefits, and service delivery? What aspects of policymaking in developing such a program are unique to Japan? This article presents answers to these questions.     

Willingness to Use Formal Long-Term Care Services by Korean Elders and Their Primary Caregivers

This study examined predictors of older adults' and primary caregivers' willingness to use formal long-term care (LTC) services to understand possible use patterns of mandatory public LTC insurance programs in Korea. It focused on views regarding who (adult children or the government) should bear the responsibility for older adults' care. Logistic regression models were estimated using data from 1,168 older Korean adults aged 65 or older and their primary caregivers from a national survey. The results showed that older adults' and their caregivers' views on care responsibility were a dominant predictor of their willingness to use both formal home care services and nursing home care services. Both older adults and their family caregivers' willingness to use LTC services should be considered when predicting demand for LTC services. Efforts should promote the perspective that formal LTC services are an acceptable social norm.     

Factors Impacting Group Long-Term Care Insurance Enrollment Decisions

This paper examines factors that influence whether or not employees choose to enroll in a group long-term care insurance plan. A conceptual family decision-making framework is used to group factors to study the enrollment decision of 509 state employees who were offered a long-term care insurance plan in 2000. Logistic regression results revealed that employee age, perceived risk, perceived affordability, decision-making style (communication with others and use of information), goals of control and choice, goal of financial peace of mind, household income, and potential caregiver availability explained 68.7% of the decision to enroll. Results support the key role of perception, specifically the perceived risk of needing long-term care and the affordability of the insurance plan, in the decision outcome.     

Enabling Informed Consumer Choice in the Long-Term Care Insurance Market

ABSTRACT

Provisions in the Health Insurance Portability and Accountability Act of 1996 (HIPAA) may increase private long-term care insurance sales without imposing substantially more stringent consumer-protection features. The ability of consumers to make informed choices when purchasing this complex product is examined in light of these changes. Data were collected through detailed examinations of policies and interviews with industry experts, insurance companies, agents, consumer groups, and regulators. Because of the complexity of this product, the goals of expanding consumer choice and ensuring that consumers are able to make informed decisions often work against each other. Mechanisms are discussed through which the government can facilitate informed choice and improve consumer protection. The authors contend that, because the government is providing tax incentives that encourage consumers to purchase the product, it has the responsibility to ensure that consumers understand the long-term care insurance they purchase.     

Israel’s Long-Term Care Social Insurance Scheme After a Quarter of a Century

Long-term care social insurance schemes exist in a number of countries, while the introduction of such schemes enjoys some support in others. Israel’s long-term care social insurance scheme has been operating since 1988. This article examines the emergence, goals, design, and impacts of this scheme and draws out some of the lessons that can be learned from Israel’s quarter century experience of long-term care social insurance.     

An International Review of the Long-Term Care Workforce

Abstract

The developed world's population is aging, due to trends of increased life expectancies and decreased fertility rates. These trends are predicted to increase demand on long-term care services. At the same time, the long-term care workforce is in shortage in most of the developed world. Moreover, such shortages are expected to increase due to parallel socio-demographic factors. The increase in demand for long-term care, coupled with shortage in supply of care workers, has promoted some attention from policymakers. The current paper provides an international review of institutional arrangements for long-term care in different developed countries and in particular explores different strategies used or proposed to resolve the shortage in the long-term care workforce.     

Long-Term Care Policy: Singapore’s Experience

Singapore, like many developed countries, is facing the challenge of a rapidly aging population and the increasing need to provide long-term care (LTC) services for elderly in the community. The Singapore government’s philosophy on care for the elderly is that the family should be the first line of support, and it has relied on voluntary welfare organizations (VWOs) or charities for the bulk of LTC service provision. For LTC financing, it has emphasized the principles of co-payment and targeting of state support to the low-income population through means-tested government subsidies. It has also instituted ElderShield, a national severe disability insurance scheme. This paper discusses some of the challenges facing LTC policy in Singapore, particularly the presence of perverse financial incentives for hospitalization, the pitfalls of over-reliance on VWOs, and the challenges facing informal family caregivers. It discusses the role of private LTC insurance in LTC financing, bearing in mind demand- and supply-side failures that have plagued the private LTC insurance market. It suggests the need for more standardized needs assessment and portable LTC benefits, with reference to the Japanese Long-Term Care Insurance program, and also discusses the need to provide more support to informal family caregivers.     

Exploring Policy and Financing Options for Long-Term Care in Taiwan

Summary

Policy and financing arrangements for long-term care are important themes in each country and/or region, and Taiwan, with its unique historic and politico-economic background, can be regarded as a bridge between well-developed and under-developed countries. Policy formulation about long-term care in Taiwan involves several agencies in the government, including Ministry of Health, Interior Affairs, Education, Insurance Bureau, and Economic Council, and formulation of policy objectives has progressed considerably in the last five years. Financing arrangements are less well-developed because the National Health Insurance Program began only in 1995, and most long-term care is not yet covered. As demand for long-term care exceeds supply, and this gap will grow in future, current resource allocation measures are concerned to facilitate the expansion of community care rather than allowing institutional care to absorb more resources. Developing future financing options is now a central task for policymaking, and government must continue to take a leading role in consolidating financing and integrating the service systems.     

Group Long-Term Care Insurance: Decision-Making Factors and Implications for Financing Long-Term Care

This study proposes and tests a systemic family decisionmaking framework to understand group long-term care insurance (LTCI) enrollment decisions. A random sample of public employees who were offered group LTCI as a workplace benefit were examined. Findings reveal very good predictive efficacy for the overall conceptual framework with a pseudo R² value of .687, and reinforced the contributions of factors within the family system. Enrollees were more likely to have discussed the decision with others, used information sources, and had prior experience when compared to non-enrollees. Perceived health status, financial knowledge, attitudes regarding the role of private insurance, risk taking, and coverage features were additional factors related to enrollment decisions. The findings help to inform policymakers about the potential of LTCI as one strategy for financing long-term care.     

The importance of employer sponsorship in the long-term care insurance market

Medicare and Medicaid are major sources of long-term care payments and thus will bear much of the burden from the growth in long-term care service use. The large future demand for long-term care services is of great concern among policymakers due to its expense and the use of public program dollars. It is argued that the individual purchase of long-term care insurance can help alleviate the increasing financial pressure on public programs responsible for the majority of longterm care financing. However, consumers have shown little interest in insuring against the high costs of long-term care. This analysis examines the effect of several factors on the decision to purchase a long-term care insurance policy: knowledge and attitudes of long-term care insurance and the long-term care financing system, the perceived risk for longterm care, financial planning behavior, and the availability of long-term care insurance. The interim results indicate the factor most likely to affect the decision to purchase long-term care insurance is access to employer-sponsored long-term care insurance. This suggests tht the availability of affordable and high quality coverage is more important than demand-side factors such as awareness of long-term care insurance and a perceived greater risk for long-term care.     

NO ROOM FOR ABUSE

In Canada, media reports on health care tend to focus on the high costs of the health care system; reporting privileges the economic aspects of this social service. In the Canadian system, long-term care or chronic care is a type of service that is situated within the health care system. Long-term care institutions typically house older individuals who have lost a significant amount of autonomy and require constant care. Until recently, the services dispensed within these institutions were unseen by the media, and thus the public did not reflect much on these services. The publication of the Report of the Royal Commission on the Future on Health Care in Canada in 2002 has fostered a growing public awareness of the vulnerability of older individuals and those with chronic illnesses, and their relationship with their care-givers. Although it may be the case that the typical care for such persons in these situations is now emerging from a zone of invisibility, it is uncertain that the media coverage accurately portrays the realities of institutionalized care-giving. This essay examines the care practices in long-term care institutions in order to understand the processes at work in an environment in which care is commodified. The ‘area’ in which this caring labour is located is an area where constant moral compromise can create a climate where abuse can become endemic. This paper considers these environments and the potential for abuse in them in relation to the concept of ‘grey zone’, first formulated by Primo Levi and later adapted by Giorgio Agamben and Claudia Card, as well as in relation to the related concept ‘bare life’, also formulated by Agamben. The author argues that the ‘greyness’ produced by care practices that are bound to a cost-effective and task-oriented framework create an environment that is not conducive to proper moral behaviour.     

Future of long-term care financing for the elderly in Korea

With rapid aging, change in family structure, and the increase in the labor participation of women, the demand for long-term care has been increasing in Korea. Inappropriate utilization of medical care by the elderly in health care institutions, such as social admissions, also puts a financial burden on the health insurance system. The widening gap between the need for long-term care and the capacity of welfare programs to fulfill that need, along with a rather new national pension scheme and the limited economic capacity of the elderly, calls for a new public financing mechanism to provide protection for a broader range of old people from the costs of long-term care. Many important decisions are yet to be made, although Korea is likely to introduce social insurance for long-term care rather than tax-based financing, following the tradition of social health insurance. Whether it should cover only the elderly longterm care or all types of long-term care including disability of all age groups will have a critical impact on social solidarity and the financial sustainability of the new long-term care insurance. Generosity of benefits or the level of out-of-pocket payment, the role of cash benefits, and the relation with health insurance scheme all should be taken into account in the design of a new financing scheme. Lack of care personnel and facilities is also a barrier to the implementation of public long-term care financing in Korea, and the implementation strategy needs to be carved out carefully.     

Factors Related to the Institutionalization of Older Aged Individuals Using Home- and Community-Based Care Services: Data From the South Korea Long-Term Care Insurance Program, 2008–2013

South Korea introduced a public long-term care insurance (LTCI) program in response to its rapidly aging population. This study analyzed the association between living arrangement and caregiver type with institutionalization in LTCI grade 1 (very severe limitations), 2 (severe limitations), and 3 (moderate limitations) beneficiaries using data from the LTCI cohort, 2008 to 2013. The dependent variable was alteration status from home to institutional care within 1 year of receiving home service. Independent variables were living arrangement and primary caregiver type. The analysis was conducted using the generalized estimating equation model. Higher likelihoods of institutionalization were found in individuals living with a non-family member compared to individuals living with their spouses. Individuals without a caregiver or with a paid caregiver were also more likely to experience institutionalization than individuals with a spouse primary caregiver. Our findings underscore the importance of monitoring identified vulnerable groups of individuals to attain LTCI sustainability and enhance elderly quality of life.     

Children's participation in foster care placements

This article presents results from a study of the birth children of foster carers and their experiences of growing up with foster siblings. Data were gathered from focus groups (17 participants), discussion groups (16 participants), a questionnaire (684 responses) and eight individual interviews. The children's participation in the fostering placements is in focus. Accounts from the children show that several of them participate in care-giving activities in everyday life. Their participation in the official assignment is however limited and can lead to children taking on responsibility with no support from adults. The tension between children's agency and position in society is addressed. The study shows how power relations between children and adults come into play, how both children and adults (re)-produce positions where children's rights to have a say in questions that concern them are not reflected within fostering processes.     

Long-Term Care Policy and Financing as a Public or Private Matter in the United States

Summary

Effective approaches to assure adequate resources, infrastructure, and broad societal support to address chronic care needs are volatile and potentially unpopular issues that can result in many losers (those getting far less than they want) and few winners (those who gain access to scarce societal resources for care). In the United States, debates on long-term care involve a complex set of issues and services that link health, social services (welfare), and economic policies that often pit public and private sector interests and values against one another. Yet long-term care policies fill a necessary function in society to clarify roles, expectations, and functions of public, non-profit, for profit, individual, and family sectors of a society. By assessing and developing policy proposals that include all long-term care system dimensions, a society can arrive at systematic, fair, and rational decisions. Limiting decisions to system financing aspects alone is likely to result in unforeseen or unintended effects in a long-term care system that stopgap “fixes” cannot resolve. Three underlying policy challenges are presented: the need for policymakers to consider whether the public sector is the first or last source of payment for long-term care; whether government is seen primarily as a risk or cost manager; and the extent to which choice is afforded to elders and family caregivers with regard to the types, settings, and amount of long-term care desired to complement family care.     

Systems Development and Difficulties in Implementing Procedures for Elder Abuse Prevention Among Private Community General Support Centers in Japan

The present study examines differences in systems development and difficulties in implementing procedures for elder abuse prevention in 1,119 private and 606 public community general support centers under the public long-term care insurance program in Japan. The private community general support centers showed more difficulty implementing procedures than the public community general support centers. Controlling for the type of municipality, progress in systems development did not differ between the private and public community general support centers. Further research should examine how the characteristics of municipal governments are related to systems development in community general support centers.     

Emergence and evolution of co-operatives for elderly care in Japan

To cope with the unprecedented speed of aging, Japan launched the quasi-market reforms in social welfare policy and the long-term care insurance system introduced competition amongst various kinds of service providers in 2000. Co-operatives have been actively involved in service provision for elderly care combining their business dimension with associational one. There existed distinct patterns of emergence and evolution of co-operative elderly care from grass roots. Consumer co-ops started to train consumer members as care-givers and entered the care business while health co-ops made a substantial investment to build facilities and manpower for elderly care as a natural extension. Workers co-operatives were organized to provide elderly care to the increasing number of care receivers.     

HOW HEALTH INSURANCE AFFECTS HEALTH CARE DEMAND—A STRUCTURAL ANALYSIS OF BEHAVIORAL MORAL HAZARD AND ADVERSE SELECTION

Individuals with health insurance use more health care. One reason is that health care is cheaper for the insured. Additionally, having insurance can encourage unhealthy behavior via moral hazard. Previous work studying the effect of health insurance on medical utilization has mostly ignored behavioral changes due to having health insurance, and how that in turn affects medical utilization. This paper investigates the structural causal relationships among health insurance status, health behavior, and medical utilization theoretically and empirically, and separates price effects from behavioral moral hazard effects. Also distinguished are the extensive versus intensive margins of insurance effects on behavior. (JEL C51, I12, D12)     

Does Nursing Home Ownership Change Affect Family Ratings on Experience with Care?

Person-centeredness may suffer in nursing homes (NHs) with recent ownership changes. This study identifies associations between ownership change and reported care experiences, important measures of person-centered care for long-term residents in Maryland NHs. Care experience measures and ownership change data were collected from Maryland Health Care Commission reports, which reported data on 220 Maryland NHs from 2011 and 2012. Facility and market covariates were obtained from 2011 NH Compare and Area Health Resource Files. Linear regression was used to examine whether ownership change in 2011 was associated with lower care experience ratings reported during April to June 2012. Dependent variables were overall care rating (scale 1–10), percentage of respondents answering that they would recommend the NH, and assessments of five care and resident life domains (scale 1–4). Care experiences reported in 2012 were high; however, after controlling for covariates, ownership change was associated with significant decreases in 6 out of 7 measures, including a 0.39-point decrease in overall care rating (p = .001). NH managers and policy makers should consider strategies to improve patient-centeredness after ownership change.