NLGN backs social insurance solution to elder care funding crisis

The care needs of older people should be met from a ringfenced national fund paid into by all adults during their working lives, the New Local Government Network said today.

In a paper to influence the forthcoming green paper on funding care in England, the local government think-tank claimed a social insurance system would ensure people took personal responsibility for their care needs, tackling the disincentive to save in the current means-tested funding system.

However, it said it would also pool risk across society by ensuring people received a guarantee of high-quality care to meet their needs, even if this was more expensive than the level of contributions they had made.

Society’s interest

The NLGN said society had an interest in ensuring older people against care needs, as it did in protecting and educating children.

It claimed the current system was “chronically underfunded, unfair, expensive and of poor quality”, as well as ill-prepared to meet the needs of the increasing number of older people.

Though it said people would be able to opt out of social insurance contributions by investing in private insurance, the NLGN said the contributions model should be so attractive that people would pay into it.

Only available from 2030

However, it said that this social insurance system would take until 2030 to build up a pot large enough to meet everyone’s care needs.

It said current homeowners older than 50 should be offered the opportunity of higher-quality care through a form of equity release, with the costs recouped from their estates after their death. Those without a home would have care costs met out of general taxation or an optional social insurance top-up.

While backing a national social insurance model, the NLGN said local government should not only retain its commissioning responsibility for care while also taking on a lead role in the joint commissioning of health and care services, with pooled budgets.

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