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Luxembourg to have biggest age-related health costs in EU

Luxembourg to have biggest age-related health costs in EU

by Andréa OLDEREIDE 04.05.2022
Study published by Luxembourg’s central bank predicts spending increases in line with European Commission’s analysis
Photo credit: Shutterstock

A growing and aging population will nearly double Luxembourg's per-capita public spending on health care toward the end of the century, according to a study released this week by the country's central bank.

The findings are aligned with assessments by the intergovernmental group OECD and the European Commission, which forecast in 2020 that the Grand Duchy would experience the sharpest increase in aging-related spending among EU countries. 

Public expenditure on healthcare will rise from 5.8% of Luxembourg's GDP in 2020 to 7% in 2070, the study by researchers at Banque Centrale du Luxembourg and Luxembourg Institute of Socio-Economic Research predicted. That would mean public spending on healthcare will rise from €5,400 per person in 2020 to €9,400 in 50 years, the researchers said.

The mounting expenses will come mostly from rising costs of delivering healthcare and the greater demand for that care by an aging population, researchers said. 

The study predicted a public spending on long-term care rising from 0.7% of GDP in 2020 to 2.5% in 2070, with per-capita expenditure on long-term care rising from €600 to €3,400 over the same period.

“Although Luxembourg’s Social Security system currently enjoys a comfortable financial situation, the projected increase in spending endangers its sustainability,” researchers wrote. “While pensions would be the main driver of the increase in spending, enhancing the efficiency of healthcare and long-term care could contribute to limit the impact on public finances.”

Luxembourg's national health insurance fund CNS forecasted last year ballooning deficits for its health and maternity coverage as it already registered a shortfall of more than €12 million in 2020. The CNS was expected to run a deficit of €101 million in 2021 and €68 million in 2022, the service said last November.

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