Although never entirely out of the public mind, the issue of ‘Long term care’ is back in the spotlight following the Government Green Paper that was published in July this year. There is a consultation process until November 13th and a White Paper will be issued in 2010 – though any proposals are not planned for implementation until 2014 (after the next election!).
The amount of financial support that is given, the costs of providing the services, the ‘means testing’ process and the ‘postcode lottery’ are all potentially emotive elements of the ongoing debate – heightened by the comparison with the policy of provision in Scotland.
There is a sliding scale of support using ‘means testing’ limits between £13,500 and £22,250 for capital and assets. The nature of this divide means that those that have more than the upper threshold have to pay their care costs themselves. On the emotional side, many of those affected feel let down by the fact that they believed that the ‘State would provide’ on a ‘cradle to grave’ principle. Looking at the funding reality, the nature of a growing aging population has increasingly made the original intention difficult or impossible to support and it is only going to get worse.
In summary, the Green Paper sets out the following proposals:
It is proposing to give all people with a care need above a particular threshold at least some public funding for care – a minimum of a quarter to a third of the cost, rising to full support for those on the lowest incomes.
Funding
It has then put forward three options for how people might fund care costs not met by the state:
• A partnership model under which individuals are left to meet their care liability themselves. While average costs for people over 65 would be around £20,000 to £22,000, those with the highest needs, such as those with Alzheimer’s, could still face significant costs of £100,000 or above.
• An insurance model under which people would be invited to enrol in a state-backed insurance scheme – either run by the state or private insurers – and then get all of their care costs covered. The Department of Health estimated that people might need to pay £20,000 to £25,000 into the scheme, protecting those with higher needs against prohibitive costs.
• A comprehensive model under which all people over 65 would be compulsorily enrolled in a state insurance scheme. This would reduce premiums to £17,000 to £20,000, but people would need to pay regardless of whether they needed care or not.
Accommodation
Accommodation costs in care homes would not be covered by this arrangement, but these would still be covered for those with the least means, as now.
However, the government is proposing to set up a universal deferred payment scheme, allowing homeowners to have their board and lodging costs met and then recovered on the sale of their properties. This would end the current situation where deferred payments are discretionary, with arrangements differing between councils.
National consistency
The green paper also proposed a radical shift to a more nationally consistent care system:
There would be a single national eligibility threshold, under which people who had difficulty with three or more activities of daily living would be covered. People would be able to move between areas and take their eligibility for care services with them, unless their needs also changed. This would end the system of councils setting their own eligibility criteria in accordance with the ‘Fair Access to Care Services’ guidance and people having to be reassessed when they moved areas.
The government would decide what proportion of someone’s care costs would be met by the state and what by the individual, rather than allowing councils to determine charges for non-residential services, as they do now.
However, it has also asked whether it should go further in removing responsibilities from councils by specifying how much money people should receive for a given level of need, rather than leaving this to councils’ discretion. This would mean that people living in different areas would receive the same level of financial support if they had equivalent needs.
The amazing thing is that despite the ongoing nature of the debate, when the Government did the 6 month ‘engagement process’ work in 2008, they found that one third of people questioned believed that the care costs would be met by the Government. This problem is not going to go away and in the early part of this decade, there was a debate about whether we should adopt a similar approach to the US, where they rely of Long-Term insurance as a means of funding this need. At the time, this debate exposed the extent of the general expectation that the State should provide and the issue seemed to be ‘put on the back-burner’ for another day! In looking at the options currently available, it was striking how few of the major insurance providers offer policies. Indeed, there is a feeling expressed on the FSA website and by some of the special interest groups that this means of provision is expensive and complicated and needs specialist independent advice.
If people recognised the potential ‘risk’ of needing care at an early stage of their lives and made provision to fund a policy over a long term, then it is likely that the costs would be less prohibitive. As things stand, many of us still believe that this may not affect us (or our wider family) and so put off the decision. Whether the state or insurance companies are better at providing such coverage is another debate, but I am surprised that more of the insurers have not tried to engage more actively in the debate, which must be an opportunity for them to provide effective products.
