Long term care – what next?

The burning issue continues – who will foot the UK’s long-term care (LTC) bill? The Royal Commission offered many options but no concrete solutions. The government, with an already hectic schedule of welfare reform, can only commit to further informed debate on the subject. Any fundamental changes would require legislation, which is unfortunately not an option in this government. But, this has stalled neither the problem – 95,000 people enter long term care each year – nor the action of people within the industry. To gauge industry views, Health Insurance asked the following questions: Has the Royal Commission helped or hindered sales of LTC insurance?; what should be done to force further action?; and how can people be encouraged to take out LTC insurance for their future?

Paul Bennett, marketing manager, PPP lifetime care

1. Overall the Royal Commission has probably hindered because it hasn’t provided the certainty required.

2. Government lobbying needs to be done. The industry needs to respond to the government, telling it not to delay on making decisions and also provide ideas on how the recommendations can become workable.

3. One thing we can be sure about is that the State can’t pay for everyone. Therefore some individuals will be left with the responsibility to protect themselves, their assets and their independence. Therefore IFAs need to have a discussion now.

Roger Edwards, product marketing manager (protection), Scottish Provident

1. The Royal Commission has neither helped or hindered – nothing’s changed. The findings gave us no magical solution. It may have slightly hindered in as much as we’ve got another year of debate ahead of us, but it may also have slightly helped: people are now more aware that the government will not supply the answer to their long term care funding problems entirely.

2. Lobbying. Much of the problem with LTC is lack of education. More people need to understand the situation.

3. Again education is important. LTCI will appeal particularly to the clients of IFAs – they need to understand how it will fit into the financial planning scenario alongside other aspects such as retirement planning and investments.

Sian Evans, press officer, Royal College of Nursing

1. It has helped most definitely because it has placed it on the public agenda and raised awareness.

2. Lobbying of government to get it to implement the findings of the Commission.

3. The public needs to be able to make informed decisions which are based on facts which the Commission has tried to provide.

Margaret Borwick, IFA, Durkadale Professional Financial Planning and chairperson of the IFAA LTC working party

1. It has hindered – it has not improved the position of the market.

2. I think that it is highly important that the State system is determined so that people know where they are in terms of LTC.

3. Persuade nursing homes that it is all right to ask clients if they can afford to pay for the rest of their lives. I would encourage employers to provide it as a benefit as the tax position is good. Training and education are very important and I also think it is very important that consumers learn to trust advisers and providers.

Malcolm Tarling, assistant manager, media relations, Association of British Insurers

1. We felt that the original report was thorough and well argued.

2. What we want is certainty, where a regime is set out and where there are firm strategies.

3. The price of policies will fall if the insurer has certainty. So we want action from the government, because uncertainty is no good for the insurer or the consumer.

Philip Spiers, partner at Nursing Home Fees Agency

1. The expectations the public had for a solution prior to the publication of the Royal Commission probably hindered sales. But even if the government implemented all the recommendations contained in the report, people would still need to fund some of their long term care.

2. We need to put pressure on the government. But we must remember that on the funding side nothing can be done in this government because it would require legislation, meaning a delay of several years.

3. Insurance companies are saying their products are flexible enough for anything the government might introduce in the future. We need to get this message over to the public. We also need to stress the importance of independence which can be achieved through private provision.