Germany's long-term care insurance model: lessons for the United States

The implementation of public long term care (LTC) insurance in 1995 in Germany is an important public policy development that offers lessons for the U.S. The German LTC model is comprehensive and mandatory, covering 88 percent of its population, by equal premium contributions on wages from employees and employers. The new German system has uniform eligibility and benefit criteria, covers both institutional and home care, pays for family caregivers, is financially solvent, and is considered a success by the public. In contrast, the U.S. financing of LTC is largely private, with the government serving as the safety net for the majority of the LTC costs after individuals spend down their resources. This paper considers whether a German-type LTC system is feasible and affordable and discusses the issues and complexities of public LTC insurance, including cost containment, home care services, quality control, and administrative structure.