Long-term care in the region

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This article first appeared in Personal Wealth, The Edge Malaysia Weekly, on April 11 - 17, 2016.


The aged care industry in Malaysia still has a long way to go compared with other countries in the region. For instance, the Agency for Integrated Care was formed by the Singapore government’s health ministry as an independent corporate entity to look into the enhancement and integration of the long-term care sector.

According to Yip, the Singapore government has been proactive in ensuring the infrastructure development of elderly care and long-term care facilities, in addition to implementing financial products and subsidy schemes such as Medisave, Medifund and Eldershield to help individuals finance their future medical needs. 

Meanwhile, the Hong Kong government introduced the 2015 Population Policy Strategies and Initiatives document and the 2016 Policy Address in an effort to address the challenges of their ageing population. The 2015 Population Policy Strategies and Initiatives is a five-pronged strategy that includes building an age-friendly environment, promoting active ageing and tapping the valuable pool of elderly resources. In the 2016 Policy Address, it is stated that the Hong Kong government will provide about 70 additional subsidised day care facilities, among other initiatives, for the elderly. 

Long-term care is available as a rider in the policies provided by insurers in Hong Kong. However, the long-term care benefit under a life insurance plan is normally only paid if the care is determined to be medically necessary or in the event that the insured individual is unable to perform daily activities, according to Hong Kong-based CCW Global Insurance Brokers on its website.

In Japan, due to the long life expectancy and low birth rate, the government initiated a mandatory public long-term care insurance (LTCI) in 2000. Under the system, all Japanese residents above 40 are required to pay for long-term care insurance premiums, half of which is subsidised by the government. This enables the elderly to lead more independent lives and relieve the burden of family carers. 

A 2015 study titled, “Considering long-term care insurance for middle-income countries: Comparing South Korea with Japan and Germany”, shows that five years after the implementation of the LTCI, Japanese citizens had become more aware of their entitlement, thus causing the number of eligible individuals to grow to 16% of its elderly population, exceeding the initially projected 12%. 

The system’s actual expenditure also exceeded the projected ¥5.5 trillion, reaching a total of ¥6.8 trillion. As demand rapidly increased, the supply of long-term care facilities and providers also grew, creating competition in the industry. 

Apart from the LTCI, the Japanese government is looking to develop other areas of long-term care. Last year, Tech Insider reported that the government would allocate one-third of its budget to developing caregiving robots that can assist the elderly. This would address the shortage of caregivers in the country.