Tories’ Insurance Plan

I like to follow the news and so, yesterday, when I heard about the plan proposed by the Shadow Chancellor, George Osborne to allow those approaching 65 to purchase a type of insurance policy for roughly £8000 to cover future cost of nursing or residential home fees, the idea actually baffled me.

image banalities at Flickr

Sure, it served it’s purpose and made lots of headlines about the stretched middle classes who resent that they have pay for services that they receive in later life, even if it means selling their own home to do so.  But the proposal made me wonder how much Osborne and the Conservative Party actually know about the current system and the changes that the ‘Putting People First’ agenda is pushing or whether (which I suspect is the answer) they are chasing cheap headlines.

I will be clear and say that as a home-owner, there is no way on earth I would recommend anyone taking out this insurance at 65. The likelihood of going into ‘care’ is minute. Some newspapers quoted the figure but the current policy is to (quite rightly) keep care in the home as much as is possible. Those who have underlying health conditions that might indicate a propensity to need this  type of care would be excluded from the ‘insurance scheme’.

I suppose I come from a position of seeing how much care costs to the local authorities who fund it and thinking that if someone can pay for their own care, there is no reason that they shouldn’t, however I know that is not the opinion of the majority of the Great British Public and it is politically expedient to provide a ‘solution’ to this issue for the voters.

As pointed out in the Independent, the option of taking insurance against long-term care already exists in the private sector insurance market so presenting this as a public policy also makes little sense.

As with all policies though, the devil is often in the detail rather than the grand posturing designed to capture the attention of the media – just as Labour’s ‘free care for those with highest needs’ did last week.

I am sceptical of both plans to be honest, especially as the consultation period is still open for the Green Paper on the funding of Adult Care. I will await the results of that consultation although it’s looking increasingly likely there will be a change of government next year so we might be back to the beginning again..

7 thoughts on “Tories’ Insurance Plan

  1. You mean people who need residential care really have to pay for it themselves? In the Netherlands it is paid for by the government, but you will be charged a monthly fee (or if you are on benefits, these benefits wills imply be reduced), which is income-dependent.

    Also pretty stupid that, if the insurance plan is already available privately, the Tories are wanting to make it a public option, while obviously the high cost means only high-income people (who have hte money to go privat eif they desperately want to) can pay for it anyway.

  2. Can you take out insurance policies at age 65? Isn’t there a law against that, or is it just loans that that applies to?

    Re people paying for their care cb, I think the current system is unfair to those who have worked and put money into the system. You have a situation where those who paid tax and national insurance get nothing back, whereas those who paid nothing into the system get looked after. I don’t mind paying for myself and those who are poor through national insurance, but I think it is unjust t.hat those who pay get nothing. And you don’t need to be rich or middle class to pay national insurance. I do understand that social budgets are short, but I would like to know what the hell happened to all the money paid in over the past 40 years or so, that we now have a shortfall. Time to ring fence the money from national insurance I think..

  3. Astrid – currently there is a system of means-testing so that people who can’t pay, don’t and those who can pay a contribution dependent on savings. There is no charge for those who cannot pay and they receive the same service so it sounds similar to the system in the Netherlands – however, and this is the crux, the cost of a house is taken into account with this means-testing (if noone else lives in it – it is discounted if a spouse lives there and with other exceptions which would take a long time to go into!) so people end up sometimes having to sell their home to pay for residential care fees.
    That is the issue that is ‘live” at the moment – that those who have not ‘saved’ get the care for free and those who have saved have to pay.

    Julie – I expect these are ‘special’ insurance policies although I’m not sure of the details. The truth is, like it or not, that national insurance does not cover the cost of residential and nursing care. There is not enough money ‘in the pot’ after pensions and benefits are taken into account.
    We can and should ask where the money goes, I suspect the answer will not be ‘into the social care budget’.
    But, at least the main political parties are showing an interest in the debate and it is a live issue which means more thought will have to go into how these payments are made and from where this money will come.

  4. Great post. The crux of the care funding issue is how much those on low to moderate incomes should be made to contribute.

    As you correctly point out those on low incomes have always had the costs of domicillary and residential care met by the state. Those on high incomes or with substantial savings have either tended to arrange care themselves or pay the full cost of their care packages.

    Problem for the state is. Those with no income are unable to pay and those on a high income will pay no more than the cost for which they can obtain services on the open market.

    In my Authourity, due to a ‘funding gap’ the charging structure was changed. The people facing the biggest increases were those on a low to moderate income as this was the only group which could be squeezed for more money.

    In terms of IBs making a difference. I’m highly sceptical. IB’s have been so tightly caught up in just the kind of political posturing you describe with the funding issue at large. Even the boosters have now conceded they won’t save money but will, in their analysis, break-even. From the start many practitioners have refused to believe that medium to long-term IB’s will mean more money on the table.

    Then what happens when other services come under increasing pressure. How many times are needs further complicated by failiures in Housing provision, benefits and other areas, what happens when charitable organisations lose their grants?

    I too am glad that the politicians have admitted that the current system doesn’t work. I’m a little dismayed that the funding issue been portrayed as a side-effect of us living longer, especialy when It’s visible that there is just as much of a challange arising from growing poverty, inequality and all the conditions linked to them such as COPD, diabetes, obesity and mental health issues. Not to mention how these are complicated by poor housing, poor education, chaotic relationships and lack of resources.

    In many ways we need to be honest with ourselves. It’s not really a debate about funding it’s a whole renegotiation of the welfare state. The question is not who pays but, what kind of Society do we want, what our our values?

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