The FINANCIAL — Older parents are boycotting the development of long-term care funding and insurance, fearing their children will relinquish all responsibility for looking after them in their old age, new research published by the London School of Economics and Political Science (LSE) shows.
A study of 15 European countries, including the UK, by Dr Joan Costa-Font from the London School of Economics and Political Science shows that the reliance on family above the State and private sector remains very strong.
Private insurance for long-term care (LTC) is negligible in Europe and only 15 per cent of the US population has private LTC insurance.
This is despite a growing strain on people working full time and juggling responsibilities for looking after both children and older parents.
Entrenched cultural attitudes and the costs of LTC are blocking any prospect of aged health reform, revealing a “myopic societal denial,” the LSE researcher says.
Dr Costa-Font says people are failing to plan for their old age by refusing to pre-fund their caregiving needs despite the fact that 35-50 per cent of them will use long term care in their later years.
“Most parents would not admit explicitly that they resist taking out insurance for long term care, but it is a worldwide problem. Informal care by the family is still the preferred option,” Dr Costa-Font said.
In Germany, France and the Scandinavian countries, it is normal for governments to subsidise LTC by paying family members to provide care, incorporating both cultural beliefs and providing employment for predominantly women, who are the main caregivers.
In southern European countries such as Italy and Spain, however, strong cultural beliefs mean that families accept most of the caregiving responsibilities for an individual’s wellbeing, according to LSE.
The UK falls somewhere in the middle.
“Most elderly people either expect to be supported, or even bailed out, by their families or their wealth, with the option of selling their house to pay for a nursing home. The alternative of taking out insurance for long term care doesn’t appear to be a viable – or acceptable – one,” Dr Costa-Font said.
In the US, the majority of citizens with private LTC are those who need it the least. “Mostly they are affluent people who could otherwise pay for caregivers out of their own pocket,” he added.
In most European countries, less than 2 per cent of total long term care expenditure is financed through private insurance and is unlikely to achieve substantial market share without a degree of subsidisation targeted at lower-income groups.
Dr Costa-Font’s study shows that Europe can be divided into a north-south model of care: a Southern one, where 49 per cent of Greeks, 43 per cent of Portugese and 39 per cent of Spaniards think the family should be responsible for an elderly person’s care; and a Northern one, where 58 per cent of Swedish, 59 per cent of Danes and 52 per cent of Finns and Dutch think the government or private care providers should take the prime responsibility.
Dr Costa-Font says people need to adjust their expectations of family responsibility to become more in tune with reality so that much-needed reforms in the aged care sector can be pursued, according to LSE.
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