The Rising Costs of Long-Term Care in Switzerland: Who Will Foot the Bill?

Introduction

The number of individuals in need of long-term care in Switzerland is projected to significantly increase in the coming decades. This raises the crucial question: who will bear the financial burden of these escalating costs? There are three potential solutions on the table to address this pressing issue.

Exploding Costs of Long-Term Care

• Total costs for long-term care in Switzerland reached approximately 14 billion Swiss Francs in 2022.
• This marked a 30% surge over the span of a decade, according to a study by the think tank Avenir Suisse.
• With the retirement of the baby boomer generation, a substantial rise in the number of individuals requiring care is anticipated.
  

  Political Inaction and Looming Challenges
  

• Despite the long-standing awareness of the issue, there has been little political action to tackle the mounting costs of long-term care.
• The majority of citizens are unable to afford long-term care, and there is a lack of incentives to privately prepare for potential care needs.
• The current three-pillar system for retirement savings was not designed to account for the extended period of long-term care, highlighting an emerging challenge.
  

  Proposed Solutions
  

  1. Continuing with the Status Quo
  

• The prevailing political sentiment leans towards maintaining the existing system rather than embarking on significant reforms.
• The Efas reform, up for a public vote on November 24, seeks to address disparities between outpatient and inpatient care sectors but falls short of resolving fundamental issues in the long-term care insurance system.
  

  2. Implementing Mandatory Long-Term Care Insurance
  

• A potential solution involves introducing a compulsory long-term care insurance model akin to Germany’s system.
• Such insurance would cover costs for both outpatient and inpatient care, with premiums funded through a pay-as-you-go scheme similar to the AHV system.
  

  3. Introducing Private Care Capital
  

• Avenir Suisse proposes a fifth pillar to encompass long-term care, where individuals accumulate private care capital in a locked account.
• This model, inspired by occupational pension schemes, aims to incentivize prudent financial planning and allow for the inheritance of care funds.
  

  Expert Insights
  

• Professor Yvonne Seiler Zimmermann emphasizes the integral relationship between long-term care and retirement savings, advocating for transparent financing of care expenses.
• Professor Martin Eling supports reevaluating long-term care financing but cautions against prematurely burdening individuals with additional financial obligations.
  

  Conclusion
  

  The escalating costs of long-term care in Switzerland necessitate proactive measures to ensure sustainable and equitable financing. While various solutions are being considered, a comprehensive approach that integrates long-term care into the broader retirement and healthcare frameworks may offer a viable path forward.

  FAQ
  

  Q: What are the current challenges facing long-term care financing in Switzerland?
  

  A: The aging population and increasing demand for care services are straining the existing financial mechanisms, necessitating innovative solutions for sustainable funding.