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LTC Bullet:

UK Government Endorses Fundamental Principle of LTC Choice

Tuesday July 19, 2000


Last year in the United Kingdom, a Royal Commission recommended expanding public financing of long-term care. Our March 24, 1999 LTC Bullet, entitled "U.K. Should Consider Center's Plan," explained the down-side risks of such a policy and recommended our proposal instead. We wrote: "The principles underlying the Center's 'LTC Choice' plan apply in the U.K. as much as they do in the U.S. or anywhere else. Taxpayer-financed long- term care for everyone (1) raises grave access and quality of care issues; (2) destroys any incentive to take personal responsibility to obtain the best care in the most appropriate setting; and (3) carries frightening fiscal consequences for countries facing an aging baby boom bulge -- like the U.S. and U.K."

Maybe somebody "over there" was listening. Tony Blair's Labor government is likely to reject the Royal Commission's proposal for expanded public financing in favor of an approach that emphasizes personal responsibility for long-term care. As you can see from the following excerpt, the government is countering with an approach that is very similar to the Center for Long-Term Care Financing's LTC Choice plan. To wit: "...state 'mortgages' to meet the cost of long- term residential care and spare pensioners having to sell their home to pay for a nursing-home place. The Government would reclaim the value of the loan, secured on the home, only after the patient's death."

Our LTC Choice program differs in that it permits a line of credit on the entire estate (not just the home) of someone with illiquid resources who seeks public assistance for long-term care. Furthermore, unlike the British approach, LTC Choice would be privately administered by independent financial institutions with government backing and oversight, but not control. (For information on how to order a copy of "LTC Choice: A Simple, Cost-Free Solution to the Long-Term Care Financing Puzzle," consult the Center for Long-Term Care Financing's web site at

Congratulations to our English colleagues for seeing the handwriting on the wall: giving away long-term care anesthetizes the public to this risk, whereas assuring that people must pay for their own care (without immediate catastrophic financial consequences) encourages them to plan ahead and save or insure. When the age wave crests and crashes on Great Britain and America, we stand a much better chance of economic survival if our public financing programs are not over-burdened. The sooner our public policies encourage individual responsibility and stop rewarding denial of LTC risk, the better.

Story: "Ministers Set To Reject Free Care For Elderly"

"A key recommendation of the Royal Commission on long-term care of the elderly looks set to be rejected. Ministers are expected to throw out the suggestion that the state should pay the cost of personal care, such as help with washing.

"Last year the Royal Commission proposed nursing and personal care should be free to all but living and housing costs would remain the responsibility of care home residents. The Treasury was not prepared to take on the full cost of nursing and personal care, which could be up to 1 billion pounds a year and Alan Milburn, Health Secretary, is believed to have drawn up compromise measures expected to be unveiled before the end of the month. It will see the Government accepting the cost of better support services for elderly people living at home but not paying for personal care.

"At present all care is means tested and anyone with assets including property worth more than 16,000 pounds is not eligible for any state assistance. The Commission proposed raising the level of savings to 60,000 pounds.

"One of the Government's compromise proposals is thought to involve state 'mortgages' to meet the cost of long-term residential care and spare pensioners having to sell their home to pay for a nursing-home place. The Government would reclaim the value of the loan, secured on the home, only after the patient's death.

"Another idea was that three months of state-funded care would be free, regardless of a person's savings, to encourage the elderly in hospital to go into a home for short-term care, so freeing NHS beds."

Source: Chris Gray, "Ministers set to reject free care for elderly," July 12, 2000, Independent News,

Note: the last paragraph suggesting three months of free care responds to a serious problem in the UK where long-term custodial care patients often remain indefinitely in expensive hospital beds, unlike in the U.S. where Medicare moves such patients out "quicker and sicker." Three months of initially free long-term care might be fiscally viable in the United States also, if the cost of all care for people with significant assets were fully collateralized and ultimately recovered after death.

Additional Sources:

"With Respect to Old Age: Long Term Care - Rights and Responsibilities," A Report by The Royal Commission on Long Term Care, Chairman: Professor Sir Stewart Sutherland, Presented to Parliament by Command of Her Majesty, March 1999

The Center for Long-Term Care Financing's LTC Bullet on the report: "U.K. Should Consider Center's Plan," issued March 24, 1999,