The future of long-term care in Europe. A microsimulation analysis of potential demand based on benefit eligibility rules

European long-term care (LTC) systems face mounting sustainability pressures as population ageing increases the number of older adults living with functional and cognitive limitations. Yet projections of future LTC needs often rely on simplified “need” definitions (e.g., at least one ADL/iADL limitation), overlooking a critical institutional determinant of public expenditure: eligibility rules. Access to publicly funded LTC is not automatic; it is regulated by national (and in some cases regional) legislation that combines multiple vulnerability dimensions—limitations in activities of daily living (ADL), instrumental ADL (iADL), cognition, behavioural issues, and medical needs—into non-linear thresholds for benefit entitlement. Because these rules differ markedly across Europe, they can generate substantially different trajectories of potential demand for publicly financed LTC even under identical demographic and epidemiological trends.  This study investigates how the heterogeneity of LTC eligibility criteria shapes the evolution of potential demand for formal domiciliary LTC across European countries in the coming decades. We use longitudinal microdata from the Survey of Health, Ageing and Retirement in Europe (SHARE), Waves 1–9 to operationalize country-specific eligibility rules. Using SHARE’s information on ADL/iADL limitations, mobility constraints, depression symptoms, and cognitive impairment, we construct harmonized indicators of “objective vulnerability” consistent with the assessment-of-need frameworks embedded in legislation. These eligibility indicators are then embedded in a dynamic microsimulation model, the EU-FEM (the SHARE-based version of the Future Elderly Model), which simulates individual life courses through a first-order Markov Monte Carlo process. Transition models generate probabilities of changes in health and functional status over time, allowing heterogeneous trajectories by age, risk factors, and baseline conditions, while the simulated population evolves by ageing and cohort replacement.  We produce projections of the population-level prevalence of eligibility for publicly funded domiciliary LTC—interpreted as potential demand—under a baseline “no policy change” scenario. We then conduct counterfactual exercises to disentangle the role of rules versus epidemiology: (i) applying alternative countries’ eligibility rules to the same underlying population trajectories; (ii) simulating a synthetic “single-country” setting to isolate institutional effects; and (iii) evaluating stylized healthy-ageing interventions that reduce the incidence of selected physical and mental limitations by 25% among individuals aged 65–75.   The simulations highlight that eligibility-rule heterogeneity translates into markedly different projected pathways of potential LTC demand across Europe. Moreover, the same healthy-ageing intervention can yield very different reductions in projected eligibility depending on which functional domains are targeted and how each country’s rules weight physical, cognitive, and mental limitations. These findings imply that cross-country comparisons of future LTC burdens—and evaluations of prevention-oriented strategies—must explicitly account for institutional eligibility design. Ongoing work extends the framework by incorporating newer SHARE waves, improving harmonization with broader international platforms, and translating projected eligibility into cost trajectories of potential demand.