Wed, Nov 06, 2019 - Page 8 News List

Useful long-term care talk needed

By Wang Chao-ching 王兆慶

Taiwan’s previous presidential election, in January 2016, highlighted long-term care policy, with then-New Taipei City mayor Eric Chu (朱立倫), the Chinese Nationalist Party’s (KMT) candidate, proposing an insurance-based program and Tsai Ing-wen (蔡英文), the Democratic Progressive Party’s (DPP) candidate, favoring a tax-based scheme.

Four years later, Kaohsiung Mayor Han Kuo-yu (韓國瑜), the KMT’s presidential candidate, has restarted the war of words by repeating Chu’s call for an insurance-based system.

Long-term care is a specialized issue in care policy. Some advanced countries have long-term care systems that are insurance based, while others have tax-based ones — so either is possible.

The decision of which system to opt for must be decided according to conditions on the ground, including Taiwan’s progress in developing care service personnel and the depth of the nation’s fiscal pockets.

However, these aspects have thus far been poorly presented in the candidates’ campaigns.

The KMT camp, which advocates long-term care insurance, has picked two weak arguments to hold up its side of the debate.

The first one is to claim that long-term care insurance is cheap, costing no more than the price of one lunchbox per person per month.

In 2015, when the KMT’s Ma Ying-jeou (馬英九) was president, the Executive Yuan drew up a draft long-term care insurance act.

The bill, which was never passed, stated that during the first stage of the policy’s implementation, a person earning NT$50,000 per month would pay a monthly contribution of about NT$200, while their employer would contribute NT$260.

However, that would only be the insurance premium for the first three years after the policy’s implementation.

After that, the rate of long-term care insurance, just like for labor insurance and national health insurance, would keep rising to keep pace with the nation’s rapidly aging population.

The draft act stated that insurance premiums would need to be recalculated every three years to keep in step with demographic changes — the typical wage earner’s monthly contribution would cost the equivalent of an ever-more extravagant meal as the years went by.

Population projections indicate that the nation’s working population is to fall by half by 2050, while the number of disabled people is to triple by then.

If insurance benefits remained static, the average wage earner’s monthly contribution would need to be NT$800, while employers would need to contribute more than NT$1,000. Any less than that would not be enough to support long-term care insurance — and that is without accounting for inflation.

That is the curse faced by every country that has a falling birthrate and an aging society. As the population ages, the government’s long-term health insurance is like a loan that it can never pay off. It owes more with the passing of time.

The insurance-based option looks appealing if the pressure pushing insurance rates ever higher is overlooked, but the option is eventually unsustainable.

The argument that the cost of one lunchbox per person per month would cover long-term care insurance is therefore a weak one.

The KMT’s second argument begins by stating that average public spending on long-term care in Organisation for Economic Co-operation and Development (OECD) countries is 1.7 percent of GDP, while Taiwan is only spending 0.2 percent, or about one-eighth of what OECD countries are spending.

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