The BCL on Monday published a report on old age and projections of health-related public spending.
The central scenario established by the authors, Gastón A. Giordana and María Noel Pi Alperin, estimates that public spending on health care will rise from 5.8% of GDP in 2020 (excluding the pandemic effect) to 7% in 2070. Per capita spending will increase from €5,400 in 2020 to €9,400 in 2070.
Public spending on long-term care will rise from 0.7% of GDP in 2020 to 2.5% in 2070. Per capita spending on long-term care will rise from €600 in 2020 to €3,400 in 2070, while care per beneficiary will increase from €41,700 to €76,200.
These figures are “consistent with OECD and European Commission assessments, according to which Luxembourg will experience the highest increase in age-related expenditure among EU countries,” according to the authors of the study, who believe that “although the Luxembourg social security system currently enjoys a comfortable financial situation, this foreseeable increase in expenditure jeopardises its sustainability.”
The evolution of pensions, which is not covered in the study, was examined by the European Commission's Working Group on Ageing Populations and Sustainability, which predicts that pension expenditure will rise from 9.2% of GDP in 2019 to 18% in 2070 in Luxembourg. This is the highest increase in the European Union. 2070 is also expected to mark the point at which social security reserves will be exhausted.
This story was first published in French on Paperjam. It has been translated and edited for Delano.