¹Manager of the Department of Mathematics, Statistics and IT, Association of Private Health Insurers, Cologne, Germany

Abstract

In Germany compulsory long-term care insurance was established in 1995. Private health insurers undertook to implement compulsory long-term care insurance for that part of the population that had a supplementary private health insurance. This paper deals with the history of private compulsory long-term care insurance and how it is calculated, based on the principle of equivalence for lifelong premiums (provided that there is no inflation in benefits) and on an ageing provision. Furthermore, it explains its transfer elements and financial equalization, which are necessary to compensate both the insurance of very old people and those needing long-term care as well as legal restrictions on premiums.