Levy would guarantee all Australians the right to aged care

[bear]

A Medicare-style levy would guarantee all Australians the right to aged care when we need it

‘We all need to invest more effort, energy and attention into advocating for our elders in aged care,’ writes Sarah Holland-Batt.

The government-appointed taskforce has failed to mount a convincing argument why a modest financial contribution across a lifetime shouldn’t extend to aged care

The aged care royal commissioners were notably split on a number of key issues, but on one principle they were united. Older Australians should not be required to contribute to their cost of care, nor should care be means tested.

Instead, commissioner Tony Pagone wrote, every Australian should “contribute towards the financing of the aged care system through their working life” through a Medicare-style levy, therefore guaranteeing each of us the right to aged care when we eventually need it. The commissioners diverged on the nature of the levy, but agreed on the principle that a visible levy would, as commissioner Lynelle Briggs argued, “help taxpayers hold the government to account as it implements reforms”.

The royal commission’s aged care levy recommendation has now been rejected out of hand by the government’s Aged Care Taskforce Final Report – delayed for three months before its release on Tuesday – which has recommended that rather than a politically unpalatable levy of approximately 1% of taxable income, aged care ought to be means tested, enhancing the user pays aspect of our present system and placing greater impetus on older Australians with means to contribute more to their daily living costs. The cost of medical care, the taskforce recommends, should still fall to the government.

The taskforce has also recommended that upfront lump sum payments in the form of refundable accommodation deposits (RADs) ultimately be phased out over time and a rental model be adopted in which aged care residents would need to make increased, nonrefundable co-contributions to their daily living costs. It is not yet clear from the taskforce’s report what provisions will be put in place so that unreasonable increases in such rental payments – rife elsewhere in the general community – will not be levelled against aged care residents once they are in place in their new homes, nor what the overall financial implications of doing away with RADs will be for providers.

Undoubtedly, Australia’s ailing aged care sector needs a massive injection of funding – subject to greater financial reporting obligations and transparency measures – to lift the quality of care, increase staffing and address widespread issues of neglect and abuse for current residents. Newly legislated minimum staffing requirements are presently not being met in many instances due to both a lack of funding and a lack of qualified staff.

These issues will only be exacerbated in coming decades, when Australia’s rapidly ageing population will place significant strain on our system. Over the next 40 years, the number of older Australians over the age of 80 will more than triple and the number of centenarians is set to increase sixfold.

The taskforce, comprising industry insiders including aged care providers as well as healthcare and economics experts, emphasises that it has been focused on seeking “sustainable” solutions to aged care funding arrangements. However, given that the taskforce’s report includes no costings, nor a response from the government, it’s impossible to ascertain how viable or sustainable its alternate model of funding is.

In arguing for its changes, the taskforce prosecutes an equity argument, holding that a levy would not be fair on a shrinking taxpayer base in coming decades, and ultimately placing an undue burden on younger Australians to pay for the cost of care. This is a valid concern, especially given the generational shifts that will lead to vastly increased numbers of people accessing aged care in coming decades and the existing financial pressures younger Australians are enduring at present.

Yet the taskforce’s proposed model places the onus to pay for aged care solely on the proportion of Australians who end up using the system, rather than on all Australians. A user-pays system is likely to generate less funding overall than a universal levy, and drastically reduces the number of possible contributors to an exorbitantly expensive system.

Individualists will argue that this is reasonable (why pay for a system you may not even end up using?) but the social contract underpinning other aspects of Australia’s health system holds that we are all collectively responsible for investing in quality care, and to care for each other in our vulnerability. The taskforce has failed to mount a convincing argument why the same principles that underpin Medicare – a modest contribution across a lifetime in exchange for a guarantee of care, should we need it – should not extend to aged care.

After a bruising royal commission which revealed the horrifying depth of neglect of older Australians at the time of their greatest vulnerability, one thing is clear: we all need to invest more effort, energy and attention into advocating for our elders in aged care. The universal levy proposed by the royal commission is a clear way of ensuring all Australians are equally invested in our aged care system – and equally ready to hold the government to account.

www.theguardian.com/commentisfree/2024/mar/12/royal-commission-aged-care-medicare-levy-benefits

[bear]

Wealthy could pay more under proposed aged care reforms.

Why new controversial aged care reforms could be the biggest shake-up for the sector in decades

It's three years since the Royal Commission into Aged Care Quality and Safety handed down its scathing report showing how successive governments, the regulator, and providers ignored shocking neglect, abuse, and substandard care in Australia's nursing homes for decades.

WATCH

Duration: 7 minutes 45 seconds7m

In its final report, it blamed a lack of funding as one of the factors and recommended a Medicare-style levy to ensure stable and proper financing into the future.

Last year, the Albanese government appointed a task force, comprised of aged care providers, ex-public servants, some economic experts, and advocates, to examine funding options.

On Monday night, it released its report which, predictably, rejected such a levy because it would likely open itself up to political attacks for introducing another tax.

Instead, the task force recommended a complex series of extra payments and fees to be paid by people with assets, a reform that aged care CEOs have been pushing for years.

Taskforce rejects aged care tax levy

A taskforce reviewing funding for aged care has rejected the idea of a tax levy to cover the sector's costs, instead suggesting aged care payments be based on personal wealth.

Under the proposal, it's not clear who will be asked to pay more, but it's likely to be wealthy aging baby boomers who have large super funds and valuable property. They would be asked to pay higher fees for accommodation and everyday living expenses to help fund the entire system.

This, the report says, would translate into improved care and attract more investment to the market which needs to prepare for an aging population.

The federal government has increased taxpayer funding since the royal commission to around $27 billion a year and Australians already pay means-tested fees amounting to $5 billion a year.

The industry says that's not enough because almost 70 per cent of facilities are operating at a loss.

That's in contrast to publicly listed aged care companies which have recorded healthy profits in the past year and the further consolidation of the market which has seen hundreds of millions of dollars paid by some of the biggest private providers to expand their market share.

Most radical shake-up since Howard 

If the government adopts the task force recommendation to charge more, it will be the most radical shake-up since John Howard effectively privatised the sector in 1997 when he gave nursing homes the right to charge accommodation bonds and subsequently removed the requirement for registered nurses to be on duty.

When Labor took power in 2022, it reinstated the requirement for a registered nurse to be on duty 24/7 but if it adopts one of the task force's major proposals, it would radically change the rules around accommodation bonds and further entrench the Howard-era reform.

At present, accommodation bonds, now called Refundable Accommodation Deposits (RADs), are returned to the family once their loved one dies. That money is effectively an interest-free loan for aged care providers, allowing them to invest, build, and expand.

But under the proposed changes, providers would be able to keep 3 per cent of the deposit every year for a maximum of five years as an additional payment for accommodation costs.

Most elderly Australians must sell their house to pay their RAD – which, on average, is about $500,000. If the government accepts this proposal, they'd be paying an extra $70,000 in accommodation fees. In the capital cities where property prices are higher, families often pay $1 million and more in RADs, translating to an extra payment of $140,000 over five years for their accommodation.

Right now, RADs paid by elderly residents total $32 billion. If providers keep 3 per cent a year, that would reap aged care providers an extra $900 million annually.

Retaining part of the deposit is not the only extra payment being proposed either.

The task force said providers could also charge for "everyday living costs" and for "extra services", like a choice of meals and pay TV. Those "extras" are a feature of many for-profit providers already and add tens of thousands of dollars to someone's bill.

Likewise, the almost 150,000 people who receive a home care package would also be asked to contribute more to their care through co-contributions.

That's unlikely to go down well when the highest package barely funds 12 hours of care a week because of high hourly rates (which aren't always reflected in the wages paid to workers) plus administration and management fees.

Billions already paid in means-tested fees

Most people in aged care already pay a means-tested fee and it kicks in at a low bar too.

For example, elderly people with less than $60,000 in assets or about $30,000 in annual income pay means-tested fees already under the current legislation.

So what's the chance the government will give the green light to these recommendations? 

The Aged Care Minister Anika Wells says the government "will continue to analyse this report and finalise our response".

However, she should be well versed in its contents already. That task force was established under the Department of Prime Minister and Cabinet and the minister has chaired it for the past six months. It looks like the government is running all these recommendations up the flagpole to gauge public reaction before delivering its response.

The report was finalised last December and many believe the government didn't release it because it didn't want to risk a potential backlash before the Dunkley by-election – and for good reason.

These will be controversial reforms for many in the community. Baby boomers will be paying tens of thousands if not hundreds of thousands of more dollars, although it remains unclear how many people will be affected and what means testing will be used to determine who pays what.  

Food spending in aged care homes

Despite additional government funding, almost 900 aged care homes are still spending less than $10 a day on food — and operators have been told they don't need to provide "evidence" of how much they're spending to receive the extra cash. 

The task force says the reforms will simplify payments but, judging by the report, the numerous variations and categories of fees appear positively labyrinthine.

Asking self-funded retirees to cough up more for a social service is electorally dangerous – especially when there's no added benefit for doing so but rather to cross-subsidise others in the system.

And with almost 40 per cent of the sector consisting of for-profit providers, how will the public know where the money is going when the Department of Health is reliant on providers to self-report their finances?

Deadline looms for government response

But the government will be under pressure to deliver a response quickly.

The new Aged Care Act is due to be passed by July 1 this year and the section on fees and payments is simply a big black hole.

If the government is going to ask people to pay billions more in fees, it will need to improve care in nursing homes.

Advocates, lawyers and health groups are furious over omissions and additions in the draft act which they say benefit aged care providers over the elderly.

It's also under attack for its star rating system, which is supposed to help the public compare nursing homes. It has been labelled misleading because facilities that don't have proper staffing, and others that have failed up to half of the audited standards but haven't been issued with a compliance notice from the regulator, still get to display three and four stars out of five.

And serious incidents such as neglect, abuse and alleged sexual assault are at a similar level to where they were when the royal commission was on.

The latest figures published by the Aged Care Quality and Safety Commission (link to come) show there are 566 physical assaults (labelled unreasonable force) a week; 227 cases of neglect a week and 40 cases of unlawful or inappropriate sexual contact a week.

If baby boomers are going to be paying more, they will be demanding action from the government, regulator and aged care providers to vastly improve the current system.

www.abc.net.au/news/2024-03-12/baby-boombers-to-pay-more-for-aged-care-reform/103573930

[bear]

Howard's LNP reforms of trickle down economics i.e. private for profit, sure has worked a treat hasn't it?

Even though he used bully boy tactics (Patricks etc.) I can't understand why/how the electorate fell for it and believed the bosses would actually share their profits. Afterall isn't the bosses/management's greed what caused the strife in the first place; when unions came into being.

Yet here we are..... Short memories I guess. Cheers 🐻

[Denis-NFA]

bear,

your memory will be better than mine but wasn't aged care funding built into the system 'yonks' ago but slowly whittled away by need to have politicians?

[bear]

Mar 16, 2024 20:06:34 GMT 7 Denis-NFA said:

bear ,

your memory will be better than mine but wasn't aged care funding built into the system 'yonks' ago but slowly whittled away by need to have politicians?

I find it hard to keep up Denis-NFA. Perhaps it's always been this way, but, all I've seen for at least twenty five years is a revolving door of policies which suit whatever party is in power that exasperates me; a never ending growing band of government funded experts, from opposing ends of the spectrum in whatever their relevant field maybe, who seem to do nothing but flap their gums, argue, lobby and advise to suit the party narrative and not everyday Australians. 

Yeah I think I'd best say cheers here....... 🐻

[itsmylife08]

Wow, you noticed that too bear? I can't say I've noticed any difference between them whatsoever, I've lost any interest I had in politics a long time ago!!!. It is a bit like the changing of the Guard at Buckingham Palace They all look and sound the same, Jockeys may change horses but the lash always remains the same!!! One party state...... 

Cheers Itsa   

[Denis-NFA]

I think it goes back to the 1946 Referendum.

I distinctly recall my Grandmother later in her life always being 'dirty' on the politicians for taking away what they are talking about now introducing except this time its a levy whereas originally it came out of consolidated revenue.

I wonder who gets to manage "the Levy"?