What the experts say – Old age and long-term care new perspectives ?
According to a United Nations report, the number of people aged 80 and over will triple by 2050. Lucie Taleyson, Head of Technology and Innovation at AXA Santé & Collectives, shares her insight on aging-related issues.
Longer life expectancies mean an increase in the number of people suffering from chronic diseases or conditions requiring long-term care, along with a sharp rise in the related costs. What is the current situation, and what preventive steps can be taken?
In the past 60 years, men and women’s life expectancies have increased by an average of 15 years*, which is, first and foremost, excellent news!
The mortality rate of the very elderly has significantly declined.
We are witnessing the emergence of a new and growing category of ‘supercentenarians’
As a person grows older, the probability of their becoming acutely dependent increases sharply, so an ageing population automatically leads to a rise in the number of people needing assistance.In France, when an elderly person is unable to perform certain everyday activities without assistance, they can apply for the APA (allocation personnalisée d’autonomie) allowance, which provides a minimum level of assistance. However, the remaining expenses and the informal care provided by family members still amount to a significant burden, and it has become urgent to find a way for people to protect themselves from this risk.
Between 1.3 million (the number of APA beneficiaries) and 2.5 million people (as estimated by the DREES, the French division in charge of statistics) require long-term care. The total amount of funding needed to cover the cost of this care may more than double in the next 30 years. Currently, the public sector contributes €24 billion (1% of GDP) to the financing of long-term care, but the real cost is closer to €50 billion, if out-of-pocket expenses and the cost of informal caregiving are taken into account.
An overhaul of how long-term care is financed has been announced. Various solutions have been floated: although the Libault report recommends that the bulk of costs be covered by public funding, Senator Bernard Bonne has suggested supplementing the national system with mandatory private insurance (backed by health care policies, for example). This type of solution, which has the support of the French insurance company federations (FFA and Mutualité), would provide coverage to a majority of the population and accelerate the development of products and services for this market.
Private insurance offers many advantages. In addition to allowing employer participation, these policies also reap the full benefit of risk pooling and generate lower entry costs for employees during their working lives.
It should be noted that women are particularly impacted by the long-term care trend and face a three-fold disadvantage: 1) they are at a higher risk than men of requiring long-term care because they generally live longer and will require care for a longer period, 2) their retirement income is generally lower, and 3) the majority of caregivers are women (57%).
Caregivers need support
Where there is long-term care, there are caregivers! Who are they and how can AXA support them ?
There are 11 million caregivers in France, which amounts to one in six people**. In addition to the psychological and financial strain placed on them, caregivers must also accept a significant disruption to their schedules or routines.
France’s “old age” bill is the first to officially recognise and support caregivers, for example by introducing compensation for a leave of absence taken to care for family.
AXA has been a pioneer in supporting caregivers, offering solutions to employees who look after a dependent relative. This has been part of its long-term care policy for ten years.
Many countries hit by this ‘silver tsunami’ are considering\r\na public-private system to cover long-term care risks
France is not the only country that’s getting older. Could you tell us about some international initiatives?
According to the WHO, the global population is ageing fast: “Between 2000 and 2050, the proportion of the world’s population over 60 years will double from about 11% to 22%.”
In Germany, for example, public and private coverage co-exist. Each person with private health insurance is required to take out long-term care coverage. The market continues to grow steadily. People who are enrolled in the public health insurance system are automatically covered for long-term care. In Asia, where populations are ageing at a particularly fast pace, the amount of informal care provided by families is huge, and there is a colossal need for funding. An organised insurance market is emerging in a few countries, and the market’s growth potential is significant.
But despite the difficulties mentioned, ageing also has its benefits. It has an impact across industries: transportation, health care, housing, entertainment, and more. The silver economy is developing and represents a major opportunity for growth. Medical research is also growing. Through the AXA Research Fund, AXA supports many innovative programs for to help people age more gracefully.
Governments will not be able to absorb all of the costs related to long-term care, nor will they be able to manage all of the risks associated with long-term care unassisted. Insurers have a role to play, and other businesses must also get involved and participate more by raising awareness and protecting their employees.
** According to AXA’s 2019 survey, Fondation April and BVA