In response to a looming aging challenge, the government launched the 10-year Long-term Care Plan 2.0 (LTC 2.0) in 2017.

Its vision was clear and commendable — to build a quality, affordable, and accessible system that lets seniors “age in place” with dignity, supported by a network of community-based services.

While LTC 2.0 has expanded its reach, rapid growth has exposed structural weaknesses. These are not minor glitches but fundamental problems that could undermine the system if left unaddressed.

Funding conundrum: an unstable lifeline

The financial architecture of LTC 2.0 is its most significant vulnerability. The system is primarily tax-funded, relying on revenues from estate, gift, and tobacco taxes.

This model is inherently unstable, subject to economic cycles and shifting political priorities. A World Economic Forum report notes that Taiwan lacks a dedicated long-term care insurance system, leaving financing susceptible to political agendas.

Compounding this, total long-term care expenditure is only about 0.26% of GDP — a figure that raises serious questions about capacity to meet the demands of a hyper-aged society. This precarious footing creates uncertainty for providers and constrains the system’s ability to innovate and expand.

Human capital crisis: a widening care gap

A system is only as strong as the people who run it, and Taiwan faces a severe shortage of local caregiving workers. This crisis stems from a low birth rate, a rapidly aging population, and demanding working conditions that make recruitment and retention difficult.

Studies point to a strained healthcare system with high nurse-to-patient ratios, which cascades into the long-term care sector. The result is overworked staff, high turnover, and unmet needs — pushing many families to look outside the formal system.

Parallel system: the migrant caregiver dilemma

For decades, migrant live-in caregivers have been the backbone of elder care for many families. Instead of being integrated into a cohesive national strategy, however, this reality has produced a parallel system that often operates independently of LTC 2.0.

Research indicates this reliance leads to underutilization of formal services. One study found that over half of families employing migrant caregivers did not access any LTC 2.0 services, suggesting migrant labor substitutes for — rather than complements — the public system.

While caregivers provide essential 24-hour support, this substitution means some seniors may miss out on professional services such as dementia care, rehabilitation, and nutritional support. That can lead to suboptimal outcomes and hinder the goal of a universal, integrated network.

Service integration gap: a fragmented experience

At the heart of LTC 2.0’s design is the innovative “ABC” community-based model, intended to create a seamless, three-tiered network of care. Tier A centers coordinate care plans, Tier B providers offer specialized services, and Tier C stations provide local, preventive support.

In theory, the structure should deliver integrated, convenient care. In practice, implementation has been challenging. Studies have identified insufficient mechanisms for integration — from a lack of trust between agencies to fragmented information systems and unclear roles for care managers.

Forging the path forward: solutions for a sustainable future

Addressing the deep-rooted challenges of LTC 2.0 requires more than incremental adjustments. It demands a bold reimagining of core pillars — from financing to service delivery — drawing on proven international models and new technology.

Reimagining the financial blueprint: stability and sustainability

Debate over long-term care financing is central to Taiwan’s future. The current tax-funded approach contrasts with social insurance models (Long-term Care Insurance, LTCI) adopted by Germany and Japan. An LTCI system could provide a stable, dedicated funding stream shielded from political swings — but would require mandatory public contributions.

Alternatively, robust tax-funded models in Nordic countries like Denmark offer another path. Denmark prioritizes decentralized, community-based care that enables “aging in place,” financed through general taxation. Taiwan must forge a national consensus on a hybrid or dedicated financing model that ensures predictability and adequacy for decades to come.

Integrating technology: the dawn of “smart care” and LTC 3.0

The next evolution — “Long-term Care 3.0” — envisions smart technology and artificial intelligence embedded in care delivery. This is not futuristic hype but a practical response to manpower and efficiency challenges.

• Addressing manpower shortages: AI-powered ambient sensors can provide 24/7 monitoring for falls and other emergencies, reducing physical burden on staff and allowing more time for human interaction.
• Boosting service efficiency: AI can optimize scheduling, logistics, and administrative workflows, freeing up precious caregiver time.
• Enhancing accessibility: Telehealth platforms can connect people in rural or underserved areas with rehabilitation, medical consultations, and mental health support, bridging geographical divides.

Demand is rising rapidly. Home care recipients under LTC 2.0 jumped from roughly 105,000 in 2019 to 294,000 in 2022 — nearly a threefold increase that underscores the need for technology to manage scale.

A sustainable future also requires integrating the parallel system of migrant caregivers, not isolating it. The government has begun pilot plans to expand access to respite care for families employing foreign caregivers — a crucial first step.

This should grow to include complementary LTC 2.0 services: professional training for caregivers on dementia care, and access to rehabilitation services for care recipients. Ultimately, building a single, respected, sustainable workforce means reforming regulations to improve working conditions, professional development, and career pathways for all caregivers — local and migrant alike.

Taiwan’s Long-term Care 2.0 has laid the groundwork for a more humane approach to aging, dramatically expanding access to care for hundreds of thousands. Yet it stands at a critical juncture. Its viability hinges on addressing foundational weaknesses in funding, manpower, and integration.

The path forward is not a single magic bullet but a multi-pronged strategy that combines pragmatic financial reform, bold technological adoption, and a more inclusive, human-centric workforce. The challenge of building a robust long-term care system is more than a policy debate — it reflects a society’s values. It is a collective responsibility to ensure the promise of aging with dignity becomes a reality for all people in Taiwan.

Engaging in this national conversation and supporting difficult but necessary reforms will determine whether LTC 2.0 evolves into a resilient, sustainable system for generations — or buckles under the weight of demographic change.