Care homes in the UK were in turmoil at the beginning of the pandemic. Unclear processes and lack of COVID-19 testing meant many patients were sent back into homes carrying the virus.
A study from the London School of Economics has put the number of COVID-19 care home deaths in England and Wales at 22,000.
But if there’s one silver lining to come from such a tragedy it’s that the adult social care system might now get the overhaul it so desperately needs.
The issue of social care reform has been rumbling on since the coalition government established The Dilnot Commission in 2010.
The key finding from the research was to introduce a lifetime cap on what an individual could spend on their own care. So those with enough wealth and assets would pay up to an amount – £35k at the time, now roughly £46k – and then the state would pick up any further costs.
Extra funding would also be needed to boost quality of service, improve pay conditions for staff, provide better support for unpaid carers, and make the means-tested system much fairer.
The cap, however, would protect individuals against care costs getting out of control. The current system means those with assets over £23,250 have to pay for their own care, but there’s no telling how much care they’ll eventually have to pay for. It could reach into the hundreds of thousands, plunging people and their families into huge debt.
In much the same way people are covered for health care through the tax system, social care would be delivered in a similar manner.
The commercial insurance sector doesn’t provide insurance for social care because of the unpredictability surrounding future costs. Through a cap, the government can pool risks across the population and give everyone the care they need without the looming possibility of bankruptcy for the people they leave behind.
This ‘underwriting’ by the Government might also encourage the private insurance sector to develop protection up to the level of the cap.
But how much would a Dilnot-style cap cost the welfare system? According to The Health Foundation, a cap of £46k would cost around £3bn a year. It sounds like a lot, but to put it into context that figure would only go as far as funding the NHS for one week.
Add on the money it would cost to truly reform the system and that number would climb to £12bn. But again, this amount would only be enough to fund the NHS for a month.
To put it in even simpler terms, the cost to reform the social care system is equivalent to £8.30 per household per week. That’s just £3 less that what the average household pay for their car insurance.
Many nations across Europe have been grappling with the same social care conundrum.
In Germany, for example, adults pay into a Long Term Care (LTC) insurance scheme. Basically, a ring-fenced tax model. The initial plan was a similar life-time cap system to what the UK is considering, where people would pay up to a cap of €700 a month for three years, then the LTC insurance would pick up the remaining costs.
But much like England, care costs differ depending on region and not everyone needs three years of care. There was also a concern it wouldn’t be sustainable in the long term.
They now use a relative cap, which caps contributions on a sliding scale depending on a person’s length of stay.
So a person pays 95% of care costs in year one, 75% in year two, 55% in year three, and then 30% from year 4 onwards. And the excess balance is picked up by the LTC insurance pool. Germany believes it’s a fairer system, both in terms of cost and sustainability.
The government is looking at ways to fund the reform, like the LTC system, and is reportedly considering a rise in national insurance. However, Torsten Bell, Chief Executive of the Resolution Foundation claims this approach is ‘disproportionately loaded onto younger and lower-paid workers, compared to a fairer rise in income tax.’
He said it would target those groups who’d been hardest hit financially by the pandemic, while avoiding older and wealthier members of the public.
Whichever solution the UK government decide on, it will be a big step for the sector. We’ll keep an eye on how the plans unfold and follow up with another blog later in the year.
Published date: 10th August 2021
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