The care cap should be lowered not scrapped

13 Dec 17

With creative thinking, the cap could be used to not only split the care cost bill, but reduce it – so why drop it? Asks Demos’ Simone Vibert. 


Demos research released today shows the majority of the public believe that the individual, not the state, should be responsible for meeting the costs of retirement.

This will be music to the ears of the government which, in response to the challenges of an ageing population and an uncertain economic outlook, has been signalling its intent to row back support for pensioners.

Proposals from its 2017 manifesto include the replacement of the triple lock with a double lock and making winter fuel payments a means tested benefit.

Neither made it through the political whirlwind of this year, but they nevertheless indicate that the government no longer seeks to protect and support pensioners so extensively, at the expense of working age adults and families.

This was further signalled last week by the government announcing that it would not be taking forward plans to implement the cap on social care costs by 2020 – despite inferring a similar decision in the election and performing a U-turn after public outcry.

Of course, the government has always offered little support to older people when it comes to care.

And our evidence suggests that the public are increasingly accepting of that responsibility, with the majority believing that care costs (in addition to retirement in general) should be met by the individual.

However, in relation to care there is a clear view that while the individual ought to have primary responsibility, this should be met with support from the state through a co-payment of sorts.

The care cap (according to which the amount that people have to pay towards their care is limited, with the state taking over once the cap limit is reached) was by far the most fully developed co-payment system politicians had on the table.

Indeed, the policy was due for implementation in 2020, having been postponed from 2016, and the long-awaited green paper on social care funding due next summer was set to ask for views on the question of the level at which the cap should be set.

In summary, we find ourselves in the strange situation in which the public is saying louder than ever before that they are prepared to meet the costs of care, with a co-payment system, and the government is responding by scrapping the most fully thought through co-payment system we have.

Furthermore, scrapping the cap risks losing out on the wider benefits it could bring.

Discussions have thus far focused on its potential as an instrument for divvying up responsibility for care costs between the individual and the state –a formula for splitting the bill, if you like.

But to treat the cap simply as a means of determining the individual and the state’s share of the overall cost would be a missed opportunity.

The cap could be used not only to split the bill, but to reduce it.

A lowered care cap could itself promote greater awareness and understanding of care costs by shifting the tone of the conversation.

The evidence is clear that there are steps that people can take to decrease their risk of needing care in later life.

Yes, sometimes older people develop medical problems or have terrible accidents that nothing could have prevented.

But on many occasions, the problems which lead to people needing care could have been prevented (or delayed) through that person behaving differently.

For example, it has been shown that older people who have adapted their home to an agreed standard, or live in a specialist retirement property, are less likely to experience falls – something which can lead to rapid declines in health.

Why not lower the cap? - and thereby agree that the state will step in sooner to cover the costs - for people who taken steps such as these, in recognition of the fact that they have acted positively to protect their health and reduce their risk of needing care?

One response might be that a lowered cap would do little to promote responsible behaviour (and therefore cut the overall care bill) since to be effective it would require people to consider realistically the likelihood of needing care and how they would pay for it, which is something that people don’t do.

Indeed, our research shows that one in four people believe that any care they need in the future will be provided free of charge, while previous work has explored the optimism bias – a behavioural mechanism which leads people to systematically underestimate the chances of unwelcome things happening to them, such as needing care.

However, a lowered care cap could itself promote greater awareness and understanding of care costs by shifting the tone of the conversation.

As things stand, care is often a distress purchase – something only considered at a point of crisis (e.g. following an unplanned hospital admission).

As such, it signals old age, decline and the loss of control.

We may find that people are more willing to engage with care planning if the conversation becomes more about the positive things the individual can do to take control of their life, keep healthy and stay independent for as long as possible, with an additional sweetener of a financial incentive.

If the thinking behind a variable care cap is properly communicated to the public, then it could help policymakers positively engage people in care planning for the first time, giving people the tools they need to prepare and, by the same token, inspiring action.

The country is in desperate need of a new settlement between the state and the individual when it comes to social care costs. But funding isn’t the only issue.

The advantage of the cap is that with a bit of creative thinking, it could be used not only to calculate the individual and the state’s portion of the bill, but help reduce or delay the need for care altogether.

This has implications for the costs involved, but even more importantly for wellbeing and quality of life.

The government needs to either reinstate the cap or put forward a convincing alternative that can fulfil a similar function – and the latter is a big ask.

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