Long-term care financing

Since the 1990s, policymakers in different countries have raised serious concerns over the financial sustainability of LTC systems due to rapidly ageing populations. LTC refers to ‘the care for people needing support in many facets of living over a prolonged period of time’ (Colombo et al. 2011: 39). The need for LTC ‘is a consequence of sickness or frailty causing dependency on others’ (Joshua 2017: 9). LTC can be provided in institutional, community, and home settings (Rivers et al. 2000: 472) and encompasses a wide array of services ranging from rehabilitation and nursing care to assistance with activities of daily living (ADL), such as getting in and out of bed, walking, bathing, dressing, cooking, and managing money (Colombo et al. 2011; Rivers et al. 2000). LTC can be funded by general taxation (e.g. Sweden, Denmark, Finland, and Norway), social insurance (e.g. the Netherlands, Germany, Japan, and the ROK) and means-tested ‘safety net’ mechanisms (e.g. the UK, Medicaid in the US) (Joshua 2017). But informal care by unpaid family members and friends is the main pillar of most LTC systems (Joshua 2017: 12).

In traditional Asian-Pacific societies, most LTC ‘is unpaid and provided by family members, particularly women’ (United Nations Economic and Social Commission for Asia and the Pacific 2018: 1). However, shrinking family sizes, youth migration, and increasing female labor force participation have made informal care provision more difficult (United Nations Economic and Social Commission for Asia and the Pacific 2018). Additionally, ‘with an increasing gap between life expectancy and healthy life expectancy, the care needs of older persons have grown and become more complex’ (United Nations Economic and Social Commission for Asia and the Pacific 2018: 1). Hence, several governments in Asia have introduced long-term care insurance (LTCI) to help people pay for LTC services received at home or in a nursing home in the event they become unable to care for themselves due to cognitive impairment, chronic illness, or disability.

Japan introduced LTCI for the elderly in 2000. The ROK introduced LTCI in 2008 to provide eligible seniors with benefit coverage for domiciliary services and institutional service (Chon 2014). Taiwan introduced LTC Plan 1.0 in 2008 and LTC Plan 2.0 in 2017 (Chiu et al. 2019). The former aimed to establish ‘state-subsidized care for the elderly and disabled, covering home nursing, meals, and transportation, as well as rehabilitation and respite care services’ (Fulco 2018). The latter aims to establish an integrated community-based LTC system that includes healthcare, disability prevention care, dementia care, and family caregiver support services (Chiu et al. 2019; Fulco 2018; Lu 2017).

China introduced a pilot program for LTC insurance in 15 cities in 2016 to provide care protection for the disabled elderly. Singapore introduced a severe disability insurance scheme called ElderShicld in 2002, which provided basic financial protection for those who needed LTC, especially in old age (HealthHub 2019). It will introduce CareShield Life in 2020, which is an enhanced version of ElderShicld to provide higher and lifetime payouts to severely disabled claimants (ElderShicld Review Committee 2018).

The Hong Kong Special Administrative Region (HKSAR) has yet to have LTC insurance. But it launched the First Phase and Second Phase of the Pilot Scheme on Community Care Service Voucher (CCSV) for the Elderly in September 2013 and October 2016, respectively, which allowed eligible elderly persons to receive community care services that best suit their needs under the ‘money following the user’ funding approach (The Government Information Centre 2019). Eligible elderly persons can choose home-based service and/or center-based service and, if necessary, may use residential respite service and/or speech therapy service’ (The Government Information Centre 2019). But a study conducted by a think tank called Our Foundation Hong Kong found that factors such as copayments and lack of flexibility in voucher service provision reduced the attractiveness of the Pilot Scheme (One Foundation Hong Kong 2016). Professor Ycoh Eng-kiong, who was Secretary for Health, Welfare and Food of the HKSAR Government (1999-2004) and led the study of Our Foundation Hong Kong, said that the government should consider introducing an insurance scheme to fund LTC services like the model adopted in Japan (Tsang 2016).