Britain’s Prime Mister Pledges Free Home Care

The government estimates that 400,000 people will be eligible for free home care, at a yearly cost of 670 pounds million, or $1 billion. That would come on top of the 15 billion pounds the government already spends each year caring for the elderly in England.

Most of the care for the elderly is still provided by relatives and friends, while state-financed care is available only for those with low incomes. As a result, many pensioners are forced into poverty or into selling their houses if they move into a nursing home.

In Europe, there is a growing consensus among lawmakers that such a system creates perverse incentives by discouraging saving.  In the Netherlands, people can insure themselves against future care costs; in Germany, taxpayers are required to pay a percentage of their income into a fund that later covers their costs.

Brown’s plan, which is being debated in Parliament, will come to a vote before October. If it is approved, free care could soon become available in Britain and be a first step toward creating a national long-term care system for the elderly alongside the health care system, which has provided Britons with free medical care for 60 years.

Brown’s government said the changes would make the system fairer and reduce some of the cost and the strain on hospitals and nursing homes.  Some “older people in hospital linger when their treatment has been completed because the services they need to return home – nursing care, rehabilitation and simple domestic support – are difficult to organize or simply not there at all,” Brown said in a speech last month.

But some lawmakers called the policy proposals a ploy intended to win votes before the general election. Skeptics also raised concerns about the costs of free care, pointing to Scotland, where some home care has been free since 2002.

Scotland offers the service to about 55,000 people but has been under pressure to curb or scrap it as costs have spiraled.  Those costs rose to 358 million pounds in 2009, up 11 percent from a year earlier and almost triple the 125 million pounds a year originally earmarked to support the service, according to Scottish Parliament figures.

The Conservative Party also raised concerns about the cost of the plan and proposed a voluntary insurance program similar to that in the Netherlands instead.

Posted by the American Association for Long-Term Care Insurance.

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