The government’s decision to park key recommendations of the Dilnot Commission on the funding of long-term care for the elderly was a disappointing move.
It ducks the very serious need to plan for people in the last years of their lives.
There were, however, substantial problems with the Dilnot reforms, which have been identified in a new research paper for the Bow Group thinktank.
The £75,000 cap on an individual’s contribution to their own care that the Dilnot reforms proposed is too high to provide the social justice it intended.
The cap does not include living costs and is not a true reflection of the cost of long-term care. It lulls the public into a false sense of security: it is not a cap on the total cost of care and does not protect anyone from the catastrophically high costs of care paid for by local authorities.
Moreover, it allows the assets of many low- and middle-income retirees to be stripped away quickly in old age if they need care in a residential home or in their own home.
But it need not be like this.
Elderly care should not be cost-capped on personal wealth, as Dilnot proposed, but on the intensity of care and the length of stay in assisted residential accommodation that each person needs.
Nursing home care is less expensive than staying in hospital and is much less burdensome on society than people think as the majority of people who live in nursing homes are very elderly and do not live for long.
Data from Bupa from 2009 show that just 10% of residents survive in a nursing home for more than six years and only 30% survive for up to three years, of whom half die in the first 12 months.
One alternative approach to the Dilnot reforms is the creation of a lump-sum pre-insurance payment scheme.
Based on an analysis of insurance data by the Strategic Society Centre, lump-sum pre-insurance payments would guard against catastrophic costs.
The payment scheme would involve a one-off cost at the beginning of long-term care that effectively acts as an insurance premium for the risk of needing long-term care.
A small increase in initial payments by many would preload the system to insure the few who require care for more than five years.
This is really what national insurance, based on contributions, should be for those who have retired.
The Dilnot reforms would spread the contribution of a retiree to their care over a period of time.
But if the maximum cap was recovered upfront with means testing, then quality nursing care could still be afforded, pressure on NHS services would be alleviated and retirees who needed non-hospital care could be cared for the rest of their lives.
Jon Stanley, an NHS doctor, has published a paper available at www.wordpress-1688526-6785241.cloudwaysapps.com