Stefanie Müller. Correspondent. Wirschaftswöche
23 November 2003
To finance care for the elderly, Spaniards are thinking about a state insurance plan along German lines.
People are living longer, and this costs money. The German state first introduced care insurance in the 1990s. To fund it, employees must contribute 1.7 percent of their gross monthly income. The idea is to avoid paying for those elderly people who require the kind of attention which is an excessive burden for the public health-insurance system. But families, who frequently take in their parents because of the high costs of private residential homes for the elderly, also get relief, both financially and psychologically. The insurance, which envisages three phases of care requirements, makes it possible to hire nursing personnel to bathe, feed and provide medical attention to the sick. There is also the possibility of co-financing care in a private home.
The Spanish government is increasingly interested in the German model, since the Family Parents Association, which has undertaken care of the elderly to date, is going through tough times. An ever-increasing number of women work outside the home and no longer have time to nurse their elderly family members. Moreover, it is no longer taken for granted in Spain that different generations live together under the same roof, or even in the same town.
For Spain, a state solution is, therefore, also inevitable. There is an acute shortage of places in state residential homes for the elderly. The birth-rate is one of the lowest in the world, and life expectancy is the highest in the EU. On top of this, Spain is the preferred place of retirement for approximately two million European pensioners from Germany, England and Scandinavia. According to experts, by 2005, an estimated five million foreigners may be descending on Spain to spend their twilight years here. Many of these are already officially registered here, with Germans alone accounting for approximately 100,000. Should the pension from their home country not prove sufficient, the Spanish state will have to step in and help out.
For every 100 citizens over 65 years of age, there are only three places available in residential homes for the elderly. There is also a lack of nursing personnel, which can be blamed on the fact that there is no official training for looking after the elderly - which is neither attractive work, nor well paid. And, as the Spanish Association of Services for the Elderly laments, the few available places will be targeted at socially deprived cases. “Spain’s middle class has a major problem: they do not go into the public homes, yet cannot afford the luxury private residencies,” says the Association’s chairman, Antonio Molina.
However, it will not be easy to introduce the German model of care insurance in these parts. This is because the German social system works according to the principle of solidarity, and has always been a generational contract: those who have more must pay more. The younger generation, through their contributions, ensure that today’s elderly are looked after, even if they have not paid into the care-insurance fund. Workers nowadays have no guarantee they will receive the same benefits in the future. Moreover, the burden of social security contributions is divided equally in Germany between employer and employees, while businesses pay the lion’s share in Spain. What is more, the Spanish system is financed 50 percent from general tax revenues.
Despite the fact that pensioners also must contribute, the German care-insurance model is heavily influenced by this principle of solidarity. Through the percentage contribution system, big earners clearly have to pay more. According to the German government’s plans for reform, not only will the contribution rate be continuously adapted to bring it in line with rising care and living costs, but childless families, and parents whose children have grown up will have to pay an additional two euros a month. Spanish society is used to controlling its own destiny and not relying excessively on the state. Only time will tell if it is ready and willing to sign this solidarity pact.