Experts have pointed out a fatal flaw in the insurance plans of the ‘Future of Care’ green paper that suggests compulsory state insurance with a one-off premium of £20,000.
The initial announcement suggested that the one off fee would take away all the risks of paying for long term care. But when reading the small print, buying that insurance would be like buying a new car and finding you then had to buy an engine, seats and four wheels.
Neither the insurance, not any of the other government proposals will cover accommodation costs for those going into care homes, as they are only intended to pay the fees for nursing care. Accommodation can account for half to two thirds of total residential care costs, which the government estimates at £30,000 a year.
So even if you forked out £20,000 to the government you would still need extra to provide for board and lodging in care homes.
Insurers suggest proposals for pre-funded insurance – voluntary or compulsory – will be unpopular. Only two providers, Partnership and Axa PPP, currently offer private pre-funded insurance, as the take-up rate has been very low.
Consultation on the new national insurance scheme will finish in November, with a white paper to be published next year. But the Department of Health says a new system could not be phased in before 2014 at the earliest – by which time a further 400,000 people will need care.