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'Care insurance' planned for old Compulsory social care bill plan
(about 3 hours later)
Older people in England could be asked to take out insurance to pay for long-term care in their old age. People in England may be forced to pay as much as £20,000 on retirement to help fund the social care system under plans being put forward by ministers.
The idea is thought to be one option proposed by ministers in a green paper due on Tuesday on reform of funding of residential and home-based social care. It is one of three options being proposed by the government alongside top-ups and insurance.
The current means-tested system for elderly and disabled people is widely regarded as unfair with ministers going as far to call it a "cruel lottery". In return, the government said a certain amount of social care would be provided free to everyone, while accommodation costs could be deferred.
But the Tories said the government broken promises on the issue. The current means-tested system is considered unfair and unsustainable.
The government admits the current system is struggling to cope with the huge pressures already being put on existing care services. The social care system covers everything from home help with washing and dressing through to full-time residential care.
Experts warn demand for social care is likely to intensify as the population ages. At the moment, anyone with a home or savings of £23,500 or more is not given any state funding for their care.
Protecting assets SOCIAL CARE PROPOSALS Partnership - The state guarantees certain level of care - maybe up to a third - leaving the individual to pick up tab for the rest. For some this could run into tens of thousands of poundsInsurance - The same as partnership, except that the government would help set up insurance schemes for people to pay into to cover extra costComprehensive - Payments of up to £20,000 to be paid after retirement, in return all social care, except accommodation costs, would be paid for by state
Under the present English system anyone with a home or savings of £23,500 or more is not given state funding for a care home or help from social services. About three quarters of people in the system fall into this category.
This means that thousands of pensioners each year have to sell their homes or use their savings to fund their long-term care, which critics say is unfair and unsustainable. This means that thousands of pensioners each year have to sell their homes or use their savings to fund their long-term care.
One option thought to be under consideration in the new green paper is for an insurance-based scheme which would allow people to protect their homes and savings. Experts predict the situation is only going to get worse in time with the ageing population.
If the government merely plans to publish an options paper, then the problem will be kicked into the long grass once again Shadow health secretary Andrew Lansley class="" href="/2/hi/business/8148188.stm">End of retirement age signalled class="" href="/2/hi/health/8148116.stm">'We gave up our memories' Health Secretary Andy Burnham said the government was trying to be bold in a bid to encourage a debate.
A range of payment options is likely to be set out, including deducting a single payment from the patient's estate after their death, or making several payments in advance during their working life. "For too long politicians have avoided this issue.
Other possible options could be a co-payment system, where the state pays for the first chunk of care, then the rest is means tested; or a social care tax, working in the same way as national insurance. "We have an opportunity to grasp the nettle and confront the debate.
Health Secretary Andy Burnham said the measures would ensure a basic entitlement for everyone. "If we fail to do that we face the prospect of a diminishing quality of care being provided."
He told the BBC that "now that is a big step forward and it's not something we've been able to say before. Consultation
"But under any of the options we'll be putting forward today that is what would happen. Ministers have put forward three options which will be considered during a four-month consultation.
"We have got to end the cruel lottery with people selling their homes." Under the partnership model, between a quarter and a third of costs will be covered by the state, while the individual will be left to top-up the rest of their care.
Shadow health secretary Andrew Lansley said the green paper was unlikely to provide any firm conclusions. The insurance option builds on this by again promising a certain level of basic care free, with the government helping to establish insurance systems for people to pay into to cover for the extra costs.
class="lp" href="http://news.bbc.co.uk/1/hi/talking_point/default.stm">HAVE YOUR SAYMany of our elderly people have contributed to the tax system for years. Their care should be free[Kathyan], Sheffield href="http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=6741">Send us your comments The paper signals a welcome willingness to confront some of the hard questions about how to fix our broken care system Michelle Mitchell, of Age Concern and Help the Aged href="/2/hi/uk_news/8149507.stm">The heartache of paying for care
"If that happens, then the Conservative Party will bring forward its own proposal for the funding of long-term care. This would be free to opt in and opt out of.
"Unlike the government, we will set out a clear plan for change for both the providers of social care and the 45,000 people who are forced to sell their homes every year to pay for it." The third - and in many ways most controversial - proposal is a comprehensive system whereby people are forced to pay up to £20,000 on retirement to fund their social care package.
Free in Scotland This could be paid in a lump sum, through instalments or taken from an individual's pension, ministers said.
Andrew Harrop, from the charity Age Concern and Help the Aged said the current system was fundamentally unfair. Under all three plans, the poorest will have their full care package paid for by the state.
"Needing care is random, some people need it and others don't because they die in a sort of much shorter period of time, and what people are beginning to understand is that we should share those risks out." The government argues many people will be better off under these models as the average cost of social care for a 65-year-old is £30,000 over the rest of their lifetime.
Already it is estimated that half of women and a third of men over 65 will need long-term care at some point. And to end the "injustice" of people losing their homes when they go into care, ministers proposed allowing people to defer the costs of residential care until their death when the bill would be taken from their estate.
And the number of people aged 85 and over is predicted to double over the next 20 years. Ministers said it was now up to the public and social care sector to give their feedback on the plans.
FROM THE TODAY PROGRAMME class="" href="http://news.bbc.co.uk/today/hi/default.stm">More from Today programme Michelle Mitchell, director of the newly-merged Age Concern and Help the Aged charity, said she had concerns about the compulsory payment option and the fact people would still have to pay for accommodation costs.
At present, there are four people earning for each one who is retired, but in 40 years that ratio will fall to just two to one. But she added: "The paper signals a welcome willingness to confront some of the hard questions about how to fix our broken care system.
In Scotland the provision of free personal care has proved popular, but very expensive and it is thought unlikely that ministers in England will adopt a similar policy. "All political parties and the public must now look beyond the short-term squeeze on our national finances to agree a fairer way to pay for care."
But they concede that a new system is required to deal with a situation that threatens to create a £6bn black hole in finances over the next 20 years. It will be another five years before any changes come into effect.
Allan Bowman, chairman of advisory body the Social Care Institute for Excellence, told the BBC there was wide variation in the cost and quality of care. The shake-up has only been proposed for England although Wales and Northern Ireland, which both use means-testing, are considering reform.
"We've got to end this postcode lottery in social care and we've got to find a way of achieving a national approach, that ensures people get the best quality of care at whatever fair price can be achieved," he said. In Scotland, everyone who meets the criteria gets free social care although that threshold is set quite high to only include those with the most severe needs.