By James Smith Sales opportunities for protection insurance are growing due to delays in decisive a...
By James Smith
Sales opportunities for protection insurance are growing due to delays in decisive action on the legislative framework for long-term care (LTC) and the increasing debate between political parties on who should pay, the taxpayer or the individual.
After announcing plans for free nursing care in a July white paper, the Government's inclusion of this initiative in the Health & Social Care bill should give the best chance of it becoming law before the next election.
Under new proposals the NHS will pay the nursing care costs of people in nursing homes: the first in several planned improvements to the funding and general state of LTC in the UK. Were this bill to stall before the next election, Labour would certainly face criticism for failing to improve LTC during its time in office.
Fearful of history repeating itself, Norwich Union LTC strategy manager Sandy Johnstone points to the last general election as an example of how easily policies can fall by the wayside. Under fire for eschewing home ownership while people were forced to sell their homes to fund LTC, the Conservatives came up with a form of asset protection when last in power.
If people took out, say, £40,000 of long-term care insurance to cover necessary care fees, the Tories proposed to give them an asset protection allowance of one-and-a-half times this amount. This extra financial cushion would perhaps have meant fewer people having to sell their homes. But the Conservatives failed to make this policy law before losing the general election in 1997, and the incoming Labour government discarded the plan.
Johnstone said: "If you ask why the UK long-term care insurance market has never taken off, it's not because people are unaware of what the products could do for them, it's because there's never been any degree of certainty about what the Government will do."
Despite such pleas, the Health & Social Care bill, especially where it comes to free nursing care, is unlikely to find an easy passage through Parliament. The Government's entire white paper on LTC has come in for massive criticism, not just from opposition politicians but also from charities for the elderly and even the long-term care insurance market.
Although set to benefit from people taking out insurance policies, when they realised just how little the state will pay towards care, many insurers and advisers were disappointed with the financial scope of the paper.
The fact that most are still keen for parts of the much-maligned report to become law signifies how much political uncertainty has held the market back over recent years. If people know for certain that the state will only cover nursing fees, about 25% of the total care bill, they will finally be clear on their personal obligations: make private provision in the form of LTC insurance or face losing their assets and possibly their home.
On the surface, free nursing care for the elderly might seem to be a step in the right direction, but Labour is actually attempting to pass the white paper's most controversial initiative. After ordering a Royal Commission to investigate LTC options, the Government's decision to reject the commission's call for free personal care has met with derision from most LTC insiders.
Personal care is defined as that which directly involves touching a person's body, as opposed to treatment or therapy. Free personal care would have accounted for most of the Government's proposed £1.4bn investment in LTC, and ministers decided on free nursing care instead.
This is defined in Government's report as "the cost of a registered nurse's time spent on providing, delegating or supervising care in any setting" an ambiguous definition that critics believe will lead to more funding problems than it solves.
What about help with bathing for example? That would usually come under personal care as it is not medical treatment, but if it were for health rather than social reasons, would it automatically come under the nursing care definition and therefore be free?
Charities for the elderly have criticised all the Government's LTC proposals, but Age Concern England chief executive Gordon Lishman said he is particularly disappointed with the nursing care definition.
"It's difficult to decipher what it means," he said. "From what we understand, part of the 'free' nursing care will be the time a nurse spends delegating, rather than the time the delegating person takes doing. To balance figures, nursing organisations will have little choice but to maximise the time they say they are spending on care, and minimise the time they actually spend and the government proposals would actually build this financial logic into the system."
Confusing this tangled issue even further is the fact that the new Scottish first minister, Henry McLeish, has announced plans to review the personal care situation north of the border. The Scottish Health & Community Care Committee published a report calling for free personal care on 28 November, and the Scottish Executive must reply within eight weeks.
If Scotland did decide to introduce free personal care, a two-tier system with English care home residents paying more then their Scottish counterparts would hardly be a great vote winner for the Government.
With all this criticism of Labour policies on care for the elderly, the Liberal Democrats has recently made definite moves in response.
Coinciding with the Queen's Speech, Liberal Democrat spokesman Paul Burstow tabled a House of Commons early day motion urging the Government to abandon its limited plans and introduce a bill to reform the funding of long-term care. A cross-party group of 31 MPs has already signed this motion, giving some indi
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