Rising life expectancy over the last 50 years means that today’s 65 year olds can look forward to at least another 20 years of life. However, living longer raises the problem of years of infirmity requiring intensive and expensive care. Who should pay for that care has become increasingly important for individuals, government and society?
Currently, long-term care in Ireland is financed principally from general taxation and private out-of-pocket expenditure. The public health system provides both residential and community services, but current funding arrangements favour residential care. A subvention is available for care in a private nursing home if the recipient satisfies dependency criteria and a means-test. The level of subvention currently payable is generally insufficient to bridge the gap between income and the cost of care.
An insurance policy to provide long term care was considered an option but the Insurance industry does not believe that suitable products will be developed in the short to medium term. This is because the care system itself is an obstacle to the purchase of insurance, being very complex and dissuades people from buying an insurance product. The market is very limited because of the need to have cash up front and because people think long-term care is free, which it’s not.
Because of the value stored in them, our homes are likely to be the main area targeted to recover long term care costs. This is an emotive issue in Ireland which places a high premium on home ownership and the ability of a parent to transfer it to their children on death. However much we might wish for other people’s children to pay for our care while we leave property to our own children, economic necessity is sure to win out in the end.
Most long-term care is provided informally by family members with most of the burden usually falling on one principal carer. It is likely this will reduce due to demographic change, increasing female labour participation rate and reduced fertility. More extensive support for family carers will be needed to maintain current care provisions.