Sustainability of Long-Term Care Insurance Finances and the De-insurance of the Costs

Abstract

This paper focuses on three reform trends aimed at controlling long-term care costs : the expansion of community-based care services ; the increase in “specified facility residential care” ; and the introduction of “prevention and life-support comprehensive program”. These efforts were intended to reduce long-term care costs by deregulating facilities and staffing standards, introducing self-payment for housing costs, and excluding preventive services from insurance coverage. This paper refers to this ironic phenomenon of reducing insurance coverage in order to maintain insurance finances as “de-insurance”. This “de-insurance” initiative expands the range of uninsured services provided by local governments, but at the same time it also forces local governments to strengthen their “insurer functions.” This is intended to achieve a balance between the costs and benefits within a local area. In contrast to the National Health Insurance system, which chose to shift to a broad-area insurer, long-term care insurance focus on a narrow-area insurer, because of excessive regional disparities in services that have been exacerbated by marketization. Ultimately, this is nothing more than a departure from the insurance principle of risk diversification.