The Tory social care funding plans aim to extend to care in your own home, charges which individuals already have to pay if they move into residential care.
As it stood before the election, anyone with assets over £23,250 had to pay the full cost of their care if they move to a care or nursing home. Care costs in homes are high, with one in ten older people spending more than £100,000 in their lifetimes; £700 per week for residential care or an average of £1,000 per week for a nursing home place.
When calculating who pays what, the value of property is taken into account, and there are rules and regulations that seek to prevent older people passing their home on to others in order to avoid this.
The Tories’ propose that this system be extended to include people receiving care in their home. There are exceptions to this. If you’re one of the estimated 1.9 million older people living in poverty, this doesn’t apply to you. Also, as the Guardian reassured us, if your home is worth less than £100,000 “you’ll be fine”. According to a BBC survey the lowest average house prices in the UK are in Bradford, standing at £118,302. So, no one will be fine.
The plan is an even less generous version of the miserly US Medicaid system. There, to apply for Medicaid, older people must have less than $2,000 in the bank, no savings, no pension, and no other form of income. They can have debt, a house and a car. If people do have extra funds, they can choose to spend down by purchasing a Pre-Funeral plan. This, and only this, is an acceptable purchase in the eyes of Medicaid. All other fund and/or property transfers will be tracked and chased down later for Medicaid reimbursement.
In other words, relatives potentially become liable for care debts pursued by debt agencies.
The parallels extend further and give a clue as to the structural change intrinsic to this proposal. Health insurance companies are set to massively benefit from them through what’s known as “equity withdrawal”. Through this, older people can borrow money against the value of their property from an insurance company, which will fund care in advance of payment — at a cost.
For example, an insurance company lends you £200,000 against your house aged 65, charges say 5 percent interest a year until your eventual death at 90. You now owe them £200,000 plus 25 years’ interest at 5 percent — some £359,000.
Heaven forbid there should be a property crash, or prices don’t grow as planned. In that case, as with Medicaid, relatives are likely to become liable for debts and pursued.
Since the late 1970s, with the onset in decline of council house building, we’ve all been encouraged to “get on the property ladder”, working our way up aided and abetted by the banks who’ve charged a tidy sum in interest payments as we went. Many people regard their homes as part legacy, a stock of value they’ve worked hard to establish that they can bequeath as they please. But, if the Tories win, no longer. In that eventuality, the home becomes little more than a store of future care potential.
Not only that; the Tory plans are the vehicle through which they entrench parasitic debt-driven insurance capital into how the UK does “care”, making a mockery of the word in the process.