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Paying for an ageing population – options for funding long term care

care in own home

The new commission on the funding of care and support long-term should not consider paying for care solely through general taxation, says think tank Policy Exchange today in its latest report Careless: Funding long term care for the elderly.

 

The report says that free personal care funded out of general taxation, as was introduced in Scotland in 2002, could cost the government up to £106 billion each year - the equivalent to funding a second NHS. It recommends instead that the Commission considers three specific funding models: the King's Fund partnership model; a social insurance model as used in Europe, and a hybrid model whereby the State guarantees some level of care, but people are required to top-up for their long term care through insurance or annuity backed products.

 

The report argues that this reform will be crucial if costs to the NHS are to be kept under control in an era of tight funding. As State funded long-term care services have tightened, the burden has resulted in a rise in NHS spending on elderly care. There was a 67% increase in NHS spending on long-term care between 07/08 and 08/09. If local authorities (whose budgets are not ring-fenced) are to face spending cuts of 25%, the upward trend in NHS spending on long term care would be expected to continue.

 

Henry Featherstone, author of the report says, "Most people think that paying their taxes and National Insurance will guarantee them free care in old age, but that is not the case. Despite nine major reviews in the last fifteen years, the current system remains unfair, bewilderingly complex and penalises homeowners. We now have an opportunity to properly think through and implement a fundamental reform of the way that we pay for long-term care of the elderly - to make the system clearer and fairer, and able to meet the future demands of an ageing population."

      

Long term care: News update: 6 August 2010

 

Related links

  • Find out more about long term care insurance

 

  • What is long term care?

 

  • Enquire about long term care insurance