The Preliminary Plan of Long-Term Care Insurance

1. The Preliminary Plan of Long-Term Care Insurance

2. Outline • Origin • Background • Preliminary Scheme

3. Origin 2008.11.25 The predecessor premier of the Executive Yuan, Liu Chao-shiuan pointed out when going on an inspection tour of Department of Health: ～Long-term care is an important policy of government. Council of economic planning and development should propose the draft of long-term care insurance as soon as possible. 2009.01.21 The predecessor premier of the Executive Yuan, Liu Chao-shiuan pointed out when listening to the planning briefing made by Council of economic planning and development: ～Department of Health is in charge of the draft formulation of long-term care insurance.

4. Background

5. Rapid Demographic Ageing • In recent Taiwan, the fertility rate decreased and the average of life span increased due to advance of medical technology, the number and proportion of elderly people showed significant growth. The problem of demographic ageing became more severe. • The proportion of elderly population exceeded 7% in 1993 (1.49 million), and it became 10% in 2008 (2.39 million). It is estimated that the proportion of elderly population will reach 22.5% in 2028 (5.36 million).

6. Reference: Population estimation from 2008 to 2256 in Taiwan, Council of economic planning and development , 2008.09

7. Family Function Became Poor • The family structure changed, and members of the family reduce mutual support. • People those who have health care needs have difficulty in obtaining appropriate care from family in nowadays.

8. Number per household Number Year Year

9. The Population of Disability Growth • According to our estimation, the number of disability and dementia was about 396,937 in 2008 in Taiwan. As the population aging, the disability population will increase. It is estimated to reach 811,971 in 2028. • The Organization for Economic Co-operation and Development (OECD) had estimated the financial burden of medical and long-term care of member states in 2006. It found that the average ratio of health and long-term care expenditure to GDP will be from 6.7% in 2005 to 12.8% in 2050 in demographic ageing situation.

10. The Population of Disability Growth Reference: The assessment of the need s of long term care service in Taiwan, Yun-Tung Wang(王雲東) et al, 2009

11. Comparison of The Main Types of Long-term Care System Service supply Public sector Private sector Tax qualified long-term care insurance e.g. North Europe Public sector Public long-term care insurance e.g. German, Austria, Japan, Netherland, Korea Raising financial resources Private sector Private long-term careinsurance e.g. U.S.A Reference: Lin, Chih-Hong（林志鴻）, 2009

12. Preliminary Scheme

13. System: Single social insurance Single financial resource Partition management Local services Insurer: Bureau of national health insurance Insured person: Plan A: Entire people Plan B: Citizen over 40 years old of age Eligibility: Physical or mental disabilities in need Financial resources: For risk-sharing according to the law of large number,premiums for the financial resources as follows: Object of insurance Employer Government Assessment :It tends to apply for bureau of national health insurance , and could contract out processing include local government. Construction of Long-term Care Insurance

14. The Preliminary Plan of Long-Term Care Insurance • Insured person • Organization and legal system • Service delivery • Levels and package of benefits • Benefit standard • Financial resources • Accompanying Measure

15. Insured Person * Due to limited data, current estimates of the number of disability doesn’t include the non-physical barrier dysfunction of the psychogenic disorder, mental retardation, autism and other mental dysfunction

16. The Legal System Name Content Definition and norm for the insurer, insured person, finance, benefit, service agency, and general rule. Long-term care insurance law Qualifications, quality norms and criteria of evaluation for the long-term care facilities management, facility supply and demand, setting standards, service providers. Long-term care service law

17. Executive Yuan Organization Long –term care insurance preparatory task force Local authorities Department of Health Bureau of national health insurance Long-term care insurance committee Long-term care insurance dispute mediation committee mission organization Subordination institution Possible entrust institution

18. The insured apply Receiving unit screen Assessment Requirements classification and benefits identify Service Delivery • After the commencement of long-term care insurance , people must first make payment obligation. when an accident causing disability , they can get benefits through a needs assessment and care management system according to their degree of disability.

19. Need further support Degree of disability Level 3 Level 2 Level 3 Benefits in-kind Benefit package Benefits in-cash Home care People hiring foreign caregivers are not allowed to apply Institutional care Community care • Home nursing • Home rehabilitation • Home service • Respite care • all-day • accommodation • care • Day care • Community • rehabilitation Only disability level 3 can apply Other (innovative) services • Transportation, assistive devices • Nutrition, meals-on-wheel service • Care consultation, pharmacist consultation, nutrition counseling • Free care course and support for care givers It needs to be further evaluated whether to include insurance benefit Level and Package of benefits

20. Benefit Design Principles • Initially benefits in-kind is as the main measure, and benefits in-cash is as the supplementary measure. However, the planning of benefits in-cash should have proper supporting measures to avoid abuses happening. • It will be evaluated and adjusted according to the insurance processing conditions and long-term care system development situation during medium and long term, and retain the possibility of resumption of benefits in-cash.

21. Benefits in kind Type of benefits Benefits in cash People hiring foreign caregivers are not allowed to apply Type of Benefits

22. Formula of Benefits In-cash The financial burden of formula B is 5%more compared with A A B 30％ of benefits in-kind 40％ of benefits in-kind • It needs complementary measures when requesting the benefits in-cash, including the qualification requirements for the caregivers of eligibility, training, and related support. The insurer should regularly monitor the condition and quality of service delivery, and change to benefits in-kind instead of benefits in-cash when necessary. • The person applying for benefits in-cash can also apply for benefits in-kind except home care, day care, and accommodation care. • The setting of benefits in-cash should be prudent to avoid affecting the willingness of people to use in kind services. • People hiring foreign caregivers are not allowed to apply for benefits in-cash but only benefits in-kind. Accompanying Measure

23. Levy with health insurance User charge Financial Resources • Remittance according to economic capacity • Setting upper limit of co-payment • The premium rate and the financial burden of government need to be actuarial confirmed, and that how to secure financial resources in the future also needs further assessment. government subsidy 90％：Premium Employer The insured Financial resource structure 10％：Co-payment

24. L :E : G 30:60:10 30:－:70 60:－:40 37:30:33 Employee L :E : G 30:30:40 60:－:40 37:16:47 Farmer, Fishermen, Veteran dependents Employee Other citizens Other citizens Average Average Feasible alternatives ofPremium Allocation Rate Proposal I Proposal II c.f. the existing health insurance Uniform government subsidy Remarks : L: labor E: employer G: Government • Identical with the health insurance, small variety, and easier to propaganda. • The argument of the proportion of different types of government subsidies in different still exists. • The responsibility of government in health insurance and long-term care are the same. • The proportion of government subsidy for all people are the same. • The burden ration of employee and employer are the same. • The apportionment proportion of employee are the lowest to reduce the implementation of resistance

25. Accompanying Measure • The treatable or reversible cases are belong to the health insurance, and the care cases are belong to long-term care insurance. • Development of sub-acute care (intermediate care) • The national health insurance is in charge of certain period of sub-acute care (intermediate care) • The related benefit terms should be planned as soon as possible. • The health insurance should be compatible with the reform • The part could be attributable to long-term insurance in health insurance includes long term home care (professional nursing ) and long term social hospitalization. • For the effective use of resources, the benefit and payment system should be reformed synchronously . • Development of integrated care service model • Integrate the medical and long-term care service through a comprehensive assessment and integrated care providers plan (with care management).

26. Thank you for your attention~