Next week Andrew Dilnot will present his proposals to radically reform the funding of social care.
The Dilnot Commission is likely to suggest a partnership model with the Government capping the costs of LTC for individuals at between £35,000 and £50,000 alongside a package of measures including increasing the amount of assets an individual can hold and still receive support.
There is no silver bullet for the issue of LTC funding but Dilnot’s proposals appear to offer a positive solution to avert a possible social care catastrophe.
The package is likely to cost the Government at least £2bn annually and reports suggest Prime Minister David Cameron and Chancellor George Osborne may be unhappy with Dilnot’s conclusions.
Alongside costs, we are also seeing unhelpful headlines about the hit to Middle Britain which conveniently ignore the positive impact of individuals having their potential unlimited liabilities capped.
The Conservatives’ negative “death taxes” media campaign against Labour’s range of possible LTC solutions before the last general election shows how emotive the issue of social care funding can be.
However, it would be a huge mistake for the Government to bury its head in the sand and ignore the need for radical reform.
As the open letter to Government signed by the ABI, the Society of Later Life Advisers, Ship and a range of charities suggests, the current system is complicated, expensive, under-funded and reaching breaking point.
There is little incentive for insurers to get involved in the LTC market, given the huge potential liabilities, but a number of insurers have indicated that a cap on costs would encourage them to enter the marketplace.
What they require from Government is a stable framework that will give them the confidence to work on products without the worry that politicians will backtrack or change the rules at the last minute. This will require Labour to be prepared to be part of a genuine consensus as the reforms are likely to spread into the next Parliament.
Commissions have tried and failed before to reach a palatable answer for funding long-term care but changing demographics and the dire state of provision means the issue cannot be kicked into the long grass again. Osborne and Cameron will be making a huge mistake if they think a future LTC crisis can be conveniently ignored.