The consultation process following publication of the Government’s green paper on the future of UK long-term healthcare ended last week and industry experts will gather their thoughts to form a white paper in 2010. But since the publication of the green paper in July, the issue of long-term care has moved up the agenda and the Conserv-atives announced their own ideas to solve the UK’s impending care crisis at their party conference.
But are the main parties on the right track to solve the huge problems facing an ind-ebted country with an aging population or is this a case of electioneering?
Age Concern and Help the Aged head of policy Andrew Harrop welcomes any political “bidding war” between the parties on how to fix the crumbling care system. He says: “I hope this signals that care will be central to the political debate in the run-up to the next general election.
“If these proposals can be made to work at this cost, they could provide huge relief for many older people and their families.”
Labour has came up with three options:
- A partnership approach where everyone is entitled to a set level of care contribution regardless of means, allowing individuals to top up their funds through private products.
- A voluntary pre-funded insurance scheme with a level of state backing.
- A compulsory pre-funded scheme whereby everyone is forced to pay a tax at a certain point in their lives.
After the announcement, health minister Andy Burnham admitted that all the proposals may be subject to a sliding scale to determine who pays what.
Opinion is divided over which proposal will be the most suitable and most effective way to pay for long-term care.
Partnership managing director Chris Horlick says the partnership approach is best as it combines state aid with private investment. He says: “This would offer something for everybody. But the state cannot pick up the whole tab so it is fair that people are able to find their own solutions to make up the difference.”
Horlick says any insurance scheme, either voluntary or mandatory, will not catch on. “There is always a significant risk that you will never need to spend the money, so people will see a pre-funded scheme as a waste of money,” he says.
But Bupa head of policy Matthew Flinton says: “The care system is under- funded and is only going to get worse, so the comprehensive model must be enfor- ced whereby a mandatory contribution is made by everyone. People underest- imate the likelihood of needing care and they still seem to think that the state will pay for them.”
Bupa estimates that if a 40-year-old person contributes as little as £40 a month into a mandatory, pre-funded insurance scheme, they would be able to afford any taxes on them by the time they reach 65.
Flinton says: “If people know that they will have to make a contribution at a cert-ain date, they will make provisions to be able to do that. Depending on how early they begin those provisions, this need not be expensive.”
While opinion is divided on the three main proposals, all agree that the green paper has a gaping hole as the proposals will only pay for care rather than the “room and board” aspects of living in a residential home.
Flinton says: “Half of the cost of care is living costs and those who suffer worst are those who are in care for a long time and it adds up to quite a lot of money for a lot of people. It undermines the green paper as a solution as half of people’s costs are not covered. Omitting such a large cost is not the right approach and it is surprising that it is not in the scheme.”
The green paper also proposed a “Nat-ional Service” that combined aspects of long-term care with the NHS. At the Labour Party conference in September, Prime Minister Gordon Brown pledged that it would help 350,000 of the “most needy” people in their own homes.
Horlick says this “bizarre” announcement could result in a multi-millionaire receiving state aid but someone just above the means test threshold receiving nothing. He says: “What does that mean? Who are the most needy? The Government says it will spend around £650m to do this but that equates to £6 a day per person. That is barely enough to cover a domiciliary getting to someone’s home – it just does not stack up.”
The Conservative Party has proposed a different model for the funding of elderly care. It says a voluntary payment of £8,000 at retirement would pay for all those who need care, without anyone having to sell their home to pay for the privilege.
Key Retirement Solutions group director Dean Mirfin says any voluntary proposals will fail. “Politicians have forgotten that there was a pre-funded market and it died. The problem is that no one wants to admit they will ever need care regardless of the statistics.”
The Tories surmise that a fifth of retirees need care but Mirfin says those who are the most likely to pay the money are the ones who are already ill or those who have a history of illness in the family.
He says: “As a result, the percentage of those who pay for care compared with those who need it increases. You would end up with one in three instead of one in five using the proceeds and then it all falls down. The numbers would not work, so the state would have to pick up the pieces.”
Symponia managing director Janet Davies says both sides are merely trying to spin the proposals as “vote winners” to appease middle-income people who miss out on state aid thanks to means testing and end up having to sell their home to pay for care. Both parties have made sure to pledge that any long-term care proposals mean people do not need to sell their home.
She says: “Both Labour and the Tories are trying to make the state the good guy and to put the decision of selling the home on the homeowner. Accomm- odation and food will cost more than the care but by saying people do not have to sell their home to afford ‘care’ takes a lot of the negative emotion from what needs to be done. We live in a country where our home is our castle and no one wants to sell that home.”
Davies says the small weekly allow-ances from all proposals on the table will mean that anyone who wants better quality care will still have to pay and as a result will probably have to sell their home anyway. “These proposals are presented as a totally different approach to funding long-term healthcare but in reality it is the same. It is just spin,” she says.
Horlick says the green paper should have addressed these “middle” people more affectively. He says: “The local authority means tester should point any person who does not qualify for state aid towards an appropriately qualified financial adviser.
“No one has picked up this need for independent financial advice in any of these proposal. If they made it law that those who don’t qualify are advised to seek advice, then many more people would be helped to properly plan their long-term healthcare finances.”
The Government will publish its white paper in 2010 and experts hope that a little more can be gleaned as to the future of long-term healthcare funding in the UK before the election.
Horlick says: “If politicians were a little more honest about the fact that the vast majority of people will have to pay for the majority for their own care, then people could begin saving for it properly.”