Where To? Providing Fair Protection Against Long-term Care Costs and Financial Sustainability

For most individuals, it is difficult to foresee whether long-term care (LTC) will be required in the future, and if so, the type, the duration and the cost of that care. Over the next decades, public expenditure in most OECD countries is expected to grow rapidly, in most part because of the expected increase in age-related expenditure, such as public pension, health and LTC services. Generally, given current tax mixes and levels, expected revenues are set to grow at a slower rate than expenditures, with the potential risk of shifting their cost to future generations. The policy challenge can thus be framed as providing fair protection against the financial risk associated with long-term care, while ensuring that the way LTC revenues and expenditures is sustainable in the long-run. Targeted universalism and a forwardlooking set of collective financing policies have the potential to help striking a reasonable balance between these two competing priorities. This is what this chapter will examine.