• Industry: Healthcare
  • Type: Survey report
  • Date: 5/21/2013

The choice for elderly Germans 

Since the mid-1990s, German citizens1 covered by long term care insurance have been able to choose a cash payment (which is significantly lower than the cost of traditional services), direct services (including residential care), or a combination of the two.2

Eligibility is not based on age, but almost 80 percent of beneficiaries are 65 years old or older. Recipients are categorized according to three levels of dependency. According to the latest figures, of Germany’s 82 million people, roughly 79 million have some form of long term care insurance. Of those, roughly 88 percent are public and 12 percent private.3

Most beneficiaries of Germany’s long term care insurance stay at home (69 percent). That way they can opt for a monthly cash payment – in 2012 between €235 (US$ 300) and €700 (US$ 930) – to cover their care needs or can receive in-kind benefits – in 2012 between €450 (US$ 600) and €1550 (US$ 2065) – in the form of professional care services. People can also give the money to a caregiver friend or relative.

For the remaining 31 percent of beneficiaries living in care, these payments only cover a portion of the monthly cost of institutional (nursing home) care. If they can, recipients supplement the long term care insurance with other insurance or pension schemes. If they can’t, their families are obliged to step in and, if not, recipients must apply for social assistance as a last resort. Interestingly, most cash claimants preferred to receive care from family members, only using professionals in more serious circumstances or when informal caregivers were not available.

One concern is that, by paying informal caregivers, expectations are raised, which could ultimately reduce the number of people willing to provide care for free. From a government planning perspective, however, a high cash take-up makes future budgeting more predictable.

Taking control of care – and the associated finances – is a big step that can be very challenging for many elderly people and their families. Before introducing direct payments, care receivers should be advised on how to manage their finances and purchase medical and social care and develop a plan to improve their quality of life.

1Consumer Direction and Choice in Long-Term Care for Older Persons, Including Payments for Informal Care: How Can it Help Improve Care Outcomes, Employment and Fiscal Sustainability?, OECD Health Working Papers No. 20 (PDF 322 KB), OECD, May 11 2005
Accessed 10 October 2012.

2Expert guide to direct payments, personal budgets and individual budgets, CommunityCare, July 2012
Accessed 13 October 2012.

3Defusing the demographic “time-bomb” in Germany, World Health Organisation
Accessed 10 January 2013.


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