Pay for your care like you fund pension, says Hancock
A RADICAL new system of insurance to fund care of the elderly is being considered by ministers as they try to get a grip on the issue that almost lost the Conservatives the last election.
The Health Secretary told The Daily Telegraph the “opt-out proposal” modelled on the pensions scheme would mean every adult in England was expected to pay into a national fund to cover their care in later life.
The disclosure – which is expected to be part of a forthcoming Green Paper on social care – is the first indication of the Government’s position on the matter.
Matt Hancock, who became Health and Social Care Secretary in July, said he wanted to see people taking more “personal responsibility” for their health and care.
In return, a national system would offer individuals more security, removing the fear of facing catastrophic costs that could wipe out savings or force them to sell their homes, he told The Telegraph.
The proposals being considered are modelled on the “auto-enrolment” system of pensions, which mean people have to actively choose not to make payments. Since its introduction, the number of workers with a pension has almost doubled, with 93 per cent of people paying into one.
Mr Hancock said major changes were required to cope with the rising number of elderly people needing care – and to address the injustices of the current system. A report by the Local Government Association in August estimated there would be a funding gap for adult social care services of £3.5billion by 2025, just to maintain existing standards of care.
Meanwhile, figures from the Nuffield Trust last year showed that an inability to pay for a private care home and a shortage of publicly funded social care spaces was an increasing factor behind hospital bed blocking.
Under England’s care system, those in residential care face losing all savings and assets – including the value of their house – down to their last £23,500.
Governments have repeatedly promised to make the system fairer, but reform has proved politically toxic.
Theresa May’s manifesto pledge last year to extend the current system, so money could be retrospectively taken from assets to fund home care was
nicknamed a “dementia tax” and was blamed for almost costing the Tories the election last year.
Mr Hancock said the options under consideration include a system of insurance that covers all care costs, or – more likely – one that caps costs at a certain level. Average care costs are £25,000, but one in 10 people can face “catastrophic” costs of more than £100,000.
Mr Hancock said that a shift in societal attitudes was also required in order to face the funding question.
“I’m attracted to the model of auto-enrolment, which has been so successful in pensions,” he said.
“If you make it the norm, tell people what it is they have to do to look after themselves, it’s often the case that very few people will opt out.
“It takes away the injustice of people losing all that they have saved for,” the Health Secretary continued.
Those opting out would face the same risks as now, he said, including selling their home.
Mr Hancock today chairs a meeting of the World Economic Forum in China to discuss how technology can respond to the rising challenges of an ageing society.