Financing Long-Term Care: Ex-Ante, Ex-Post or Both?

25 Pages Posted: 19 Dec 2014

See all articles by Joan Costa-Font

Joan Costa-Font

London School of Economics & Political Science (LSE)

Christophe Courbage

Haute Ecole de Gestion de Genève - University of Applied Sciences Western Switzerland (HES-SO)

Katherine Swartz

Harvard School of Public Health, Harvard University

Date Written: December 18, 2014

Abstract

This paper examines the heterogeneity in the public financing of long-term care (LTC), and the wide-ranging instruments in place to finance long-term care services. We distinguish and classify the institutional responses to the need for LTC financing as ex-ante (occurring prior to when the need arises, such as insurance) and ex-post (occurring after the need arises, such as public sector and family financing). Then we examine country-specific data to ascertain whether the two types of financing are complements or substitutes. Finally, we examine exploratory cross-national data on public expenditure determinants, specifically economic, demographic and social determinants. We show that although both ex-ante and ex-post mechanisms exist in all countries with advanced industrial economies and despite the fact that instruments are different across countries, ex-ante and ex-post instruments are largely substitutes for each other. Expenditure estimates to date indicate that the public financing of long-term care is highly sensitive to a country’s income, ageing of the population, and the availability of informal caregiving.

Keywords: long term care, long term care expenditures, long-term care insurance, social insurance, ex-ante funding, ex-post funding

JEL Classification: I180, H500, J100

Suggested Citation

Costa-Font, Joan and Courbage, Christophe and Swartz, Katherine, Financing Long-Term Care: Ex-Ante, Ex-Post or Both? (December 18, 2014). CESifo Working Paper Series No. 5104. Available at SSRN: https://ssrn.com/abstract=2540028

Joan Costa-Font (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

HOME PAGE: http://https://joancostaifont.org/

Christophe Courbage

Haute Ecole de Gestion de Genève - University of Applied Sciences Western Switzerland (HES-SO) ( email )

Geneva
Switzerland

Katherine Swartz

Harvard School of Public Health, Harvard University ( email )

677 Huntington Avenue
Kresge Building, Room 404
Boston, MA 02115
United States
617-432-4325 (Phone)
617-432-4494 (Fax)

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