Newly-retired people should be able to sacrifice part of their pension to insure against the cost of a care home later in life, a Government-commissioned review will recommend today.
Private insurers would be expected to offer products to cover people against care home fees, the Dilnot Commission on adult social care will say. A national means-test must also be introduced to prevent local authorities applying inconsistent approaches to who is entitled to free care, the commission, led by the economist Andrew Dilnot, will recommend.
The Treasury is known to have concerns about the cost of the proposals which the Dilnot Commission will put at about £2 billion a year from 2014. The Times understands that Mr Dilnot will attack objections that his plans are unaffordable by pointing out that such a sum represents only 0.2 per cent of public spending.
In The Times last week, Mr Dilnot described current arrangements as a “mess” which leave people facing potentially ruinous bills. He urged politicians not to miss a “once-in-a-lifetime” chance to do better and added: “We must not allow this to . . . get kicked into the long grass, otherwise it is the most vulnerable in our society who will suffer.”
Andrew Lansley, the Health Secretary, insisted that such concerns were unfounded and that the Government would act on the findings. “We wouldn’t have asked Mr Dilnot and his colleagues to start this work if we were going to do that,” he said.
Advertisement
The review, commissioned by the Government last July, will recommend a limit on the amount anyone has to pay, with the Government picking up the rest. The review will suggest a range up to £50,000 but recommend that it be set at £35,000. No one should pay more than 30 per cent of the value of their home, and most will pay much less. Mr Lansley indicated that the Government would support a cap but that no decision had been made on the level.
Creating certainty over future liabilities will allow people to take out private insurance, the review will say. Currently, a third end up with bills of £20,000 and one in ten of more than £100,000, to pay care home fees of up to £900 a week. Few companies will insure against such high costs.
Mr Dilnot believes that his system will allow companies to offer products such as disability-linked annuities, where retired people forego a small amount of income when taking out an annuity with their pension pot, in exchange for cover against future care costs.
Better equity release schemes, which would allow people to have costs deducted from the value of their house after they die, will also be proposed.
Eligibility for free care will be expanded. At present if someone needs residential care and has £23,250 in savings, capital or assets they pay the full cost. Currently, local authorities measure assets in different ways, and the commission will say national standards are needed.
Advertisement
The Government is thought to be considering more consultation as the Treasury balks at paying more. Paul Burstow, the Care Services Minister, said last week: “If funding reform is to be secured during this Parliament it will require give and take. The deficit casts a long shadow.”
Yesterday Ed Miliband, the Labour leader, underlined his party’s desire for cross-party consensus.
Mike Farrar, the chief executive of the NHS Confederation, said: “Health and social care are mutually dependent. We cannot have old people stuck in NHS wards because social care arrangements are not in place.”