Complements or Substitutes? Young Germans' Experience and Expectations with Financing Sources for Long-Term Care

Area of Science:

• Gerontology
• Health Economics
• Social Policy

Background:

• Aging societies face increasing long-term care financing challenges.
• Germany established public long-term care insurance (DPV) over 25 years ago.
• Individuals require supplementary private financing for comprehensive care.

Purpose of the Study:

• Examine young Germans' (16-39) perceptions of DPV and private financing.
• Analyze the relationship between DPV and alternative long-term care funding.
• Investigate the impact of caregiving experience on expectations.

Main Methods:

• Descriptive statistics and multivariate regression analysis.
• Utilized a proprietary dataset oversampling young Germans with caregiving experience and East Germans.
• Examined experiences and expectations regarding DPV and private financing.

Main Results:

• Public long-term care insurance (DPV) is perceived as a substitute, not a complement, to private financing.
• Young Germans are less likely to rely on DPV if they anticipate private funding (48-70% reduction).
• Caregiving experience significantly increases reliance on future DPV benefits (6-18x likelihood).
• Young Germans expect future generations to fund their care more than they plan to fund their parents' care via DPV.

Conclusions:

• Young Germans underestimate the value of DPV and overestimate their private payment capacity.
• A gap exists between DPV's role as basic insurance and young Germans' reliance on private sources.
• Policy interventions are needed to reduce DPV political risks and encourage life-course savings.